Long-established in the Software industry, Uber Technologies Inc (UBER, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 4.16%, juxtaposed with a three-month change of 46.39%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Uber Technologies Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 5/10
- Profitability rank: 4/10
- Growth rank: 7/10
- GF Value rank: 1/10
- Momentum rank: 6/10
Based on the above method, GuruFocus assigned Uber Technologies Inc a GF Score of 67 out of 100, which signals poor future outperformance potential.
Understanding Uber Technologies Inc's Business
Uber Technologies Inc, with a market cap of $138.98 billion and sales of $35.95 billion, operates a multifaceted platform connecting riders with drivers, food enthusiasts with restaurants, and shippers with carriers. The company's innovative on-demand technology platform has the potential to expand into new domains such as autonomous vehicles, drone deliveries, and aerial ride-sharing. Based in San Francisco, Uber Technologies Inc operates in over 63 countries and boasts over 131 million monthly active users. The company's revenue streams are diversified, with approximately 44% coming from ridesharing and 34% from food delivery.
Financial Strength Breakdown
Uber Technologies Inc's financial strength indicators present some concerning insights about the company's balance sheet health. The interest coverage ratio of 0.5 positions it worse than 97.5% of 1560 companies in the Software industry, signaling potential challenges in managing interest expenses on debt. Moreover, the low cash-to-debt ratio at 0.47 indicates difficulties in handling existing debt levels. The debt-to-Ebitda ratio stands at 4.51, surpassing Joel Tillinghast's warning level of 4 and is worse than 82.8% of companies in the Software industry, suggesting a red flag unless tangible assets cover the debt.
Profitability Breakdown
Uber Technologies Inc's low Profitability rank can also raise warning signals. The company's Gross Margin has declined over the past five years, with figures showing a decrease from 53.38 in 2019 to 32.90 in 2023. This trend underscores the company's struggles to convert its revenue into profits, which is a critical aspect of sustainable growth and financial health.
Next Steps
Considering Uber Technologies Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential underperformance. While the company has a robust market presence and innovative platform, the financial indicators suggest that it may face significant challenges in the near future. Value investors should carefully weigh these factors when considering Uber Technologies Inc as a potential investment. For those seeking companies with stronger financial metrics, GuruFocus Premium members can explore more options using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
