Why Uber Technologies (UBER) Is Back In The Spotlight
Uber Technologies (UBER) is back in focus after an arbitrator ordered the company to pay US$40 million in a wrongful-death case that challenges its long standing claim of being just a technology platform.
Recent trading suggests investors are reassessing Uber Technologies as legal and regulatory risks share the spotlight with growth plans. The share price has fallen about 11% over the past month and is down 15.7% year to date, while the one year total shareholder return has declined 28.5%. This contrasts with a positive three year total shareholder return of 57.9% and five year total shareholder return of 52%, indicating long term holders have still seen gains even as near term momentum has weakened around headlines such as the Delivery Hero acquisition agreement, new autonomous vehicle partnerships and the latest wrongful death ruling.
Compare Uber Technologies with a curated group of resilient peers facing legal, regulatory, or business pressure by scanning the 30 resilient stocks with low risk scores, which still shows solid risk profiles on key fundamentals.
With Uber Technologies down sharply despite news on profitability and partnerships, the key issue is whether today’s legal overhang is already reflected in the price or if investors are still paying up for that risk.
Most Popular Narrative: 40% Undervalued
On the most followed narrative, Uber Technologies screens as undervalued, with a fair value of $116 against a last close of $69.89, which puts the legal overhang and autonomous spend into a different light for anyone focused on long term cash generation.
The market is no longer debating whether Uber can become profitable. It is debating who owns the economics of transportation when the driver disappears.
See why 24 investors see Uber Technologies as 40% undervalued.
Result: Fair Value of $116 (UNDERVALUED)
Still, a sharp regulatory ruling or disappointing autonomous vehicle economics could quickly challenge the idea that Uber Technologies deserves a higher valuation multiple.
Find out about the key risks to this Uber Technologies narrative.
Next Steps
Mixed signals on Uber Technologies can either paralyze you or push you to look closer at the facts yourself. To see how the legal concerns and potential upsides balance out, review the 3 key rewards and 1 important warning sign.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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