Shane Obata Uber UBER-N WATCH May 29, 2025

Rough ride along with the market. Good component of a portfolio, given all the tariff situations. Part of the issue is that the market incorrectly looks at autonomous driving as having one winner and the rest losers. See his blog at goodreid.com under Insights.

Largest ride-sharing and delivery company in the world. Great business model. His son at university uses it all the time (and Richard's paying for it). New CEO has done a spectacular job. Profits are on the rise. Ride-sharing is slightly less than 1% of all driving, massive opportunity ahead. Expanding to smaller cities. Robotaxis are in their future. No dividend.

Missed 2 key metrics. Past year has been quite sideways, more of a trading stock. Above 200-day MA, but that 200-day MA has been quite flat. Forward earnings estimates have ratcheted down a bit, but you're still paying ~30x forward PE. That's problematic. 200-week MA seems to be steadily moving higher.

Longer term, will face lots of competition in the space as well as regulatory risk.

They recently announced agreements with two robo taxi companies. Amazon's model is one app for everything, all sellers, and Uber could replicate this system which would be significant. Robo taxis are already running in California, Also in Austen Texas where Waymo's robo taxis have 99% more riders than cars with drivers, but at this this point there are only 100 driverless cars. There are several advantages to driverless cars including the response to calls is immediate.

The rides and Uber Eats are growing rapidly. Advertising boasts 175 million active users of the Uber app, and they can still capture more of the ad potential. Their freight division should be set aside; it's distraction. Also, their self-driving business will be exciting for Uber.

Tariffs have taken a bit of a back seat, so now focus is returning again to robotics and robotaxis. Only 3 are in that race -- UBER, Waymo, and TSLA. He particularly likes Waymo, and then TSLA. 12-month price target is $115.

The fundamentals are excellent. It will break $100 and will be up for many years.

Is very mispriced. The market feels that if Tesla succeeds in self-driving cars, it will put Uber out of business. No, won't happen. Nearly 20% of Uber's fleeting is autonomous now. Uber is outgrowing their valuation (the PE is dropping). They recently joined the S&P. They have a fantastic future.

One of the themes that will come out of today's show is that he's looking for companies that have strong and growing cashflow. This name has gone from negative cashflow to positive. Classic company for this environment, with the ability to change prices tomorrow if costs go up today.

Fits his requirements of not having a ton of debt, having pricing power, strong market position. Technically, nice consolidation over the last year and has broken out. Now a nice pullback to a really good entry point. Large-cap growth still an important engine in this market.