Why is $UBER not valued 3x higher?

Gross sales are nearing $100Billion a year and growing. *Weird accounting rules make them report their sales after taking out driver costs. Thats like walmart reporting their sales after they paid their vendors. Idiotic. Their real gross sales are close to $100B annualized. Probably reach $150B in 23. ​ Comparable huge companies gross sales to market cap: UBER: .8 of sales ($100B sales & $85B market cap) And they have very little capital expenditures. Tesla: 20x sales ($45B sales & $1Trillion market cap) and extremely capital intensive Nike 6x sales ($45B in sales, $270B market cap). Sales Force: 13x sales ($24B sales, $300B market cap). etc - almost all of biggest companies in United states are 5x sales or more in terms of market cap. ​ YES, its about cash flow, not sales, but its future cash flows. For a mature company, today's cash flow is extremely important. But for a growing company, the sales tell us alot about potential cash flow in the future after they stop growing. At $150B in sales in a few years, its almost guaranteed that they will make 5-10% profit at a minimum, once they stop growing. They just posted first operating profit, so they are starting to show signs of mature company not constant growth because of their CEO. Their CEO appears to be a badass. They can easily raise prices if driver costs go up, so all the employee classification legal stuff seems irrelevant. 5.Once they stop growing as fast and get through pandemic completely, they should be able to make $10B in profit fairly easily. 25x that is roughly 3x their market cap now. 25x is not out of line for huge company with big brand. What am I missing? And I think these numbers are semi-conservative. ​ Basic calc: $100B sales -$80B drivers - $10B for overhead = $10billion profit. $10B for office staff, app development seems extremely high. Its not like they have any capital expenditures or huge customer service reps, etc. Don't get it. I think their overhead is much higher right now because of continued investment in growth. Eventually they are going to stop growing as fast and explode in profit. Tell me what I"m missing.

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Substantial-Issue-61

Nov 13, 2021

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Why is $UBER not valued 3x higher?

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  1. Gross sales are nearing $100Billion a year and growing.

    *Weird accounting rules make them report their sales after taking out driver costs. Thats like walmart reporting their sales after they paid their vendors. Idiotic. Their real gross sales are close to $100B annualized. Probably reach $150B in 23.

Comparable huge companies gross sales to market cap:

UBER: .8 of sales ($100B sales & $85B market cap) And they have very little capital expenditures.

Tesla: 20x sales ($45B sales & $1Trillion market cap) and extremely capital intensive

Nike 6x sales ($45B in sales, $270B market cap).

Sales Force: 13x sales ($24B sales, $300B market cap).

etc - almost all of biggest companies in United states are 5x sales or more in terms of market cap.

YES, its about cash flow, not sales, but its future cash flows. For a mature company, today's cash flow is extremely important. But for a growing company, the sales tell us alot about potential cash flow in the future after they stop growing. At $150B in sales in a few years, its almost guaranteed that they will make 5-10% profit at a minimum, once they stop growing.

  1. They just posted first operating profit, so they are starting to show signs of mature company not constant growth because of their CEO.

  2. Their CEO appears to be a badass.

  3. They can easily raise prices if driver costs go up, so all the employee classification legal stuff seems irrelevant.

5.Once they stop growing as fast and get through pandemic completely, they should be able to make $10B in profit fairly easily. 25x that is roughly 3x their market cap now. 25x is not out of line for huge company with big brand. What am I missing? And I think these numbers are semi-conservative.

Basic calc:

$100B sales -$80B drivers - $10B for overhead = $10billion profit.

$10B for office staff, app development seems extremely high. Its not like they have any capital expenditures or huge customer service reps, etc. Don't get it.

I think their overhead is much higher right now because of continued investment in growth. Eventually they are going to stop growing as fast and explode in profit.

Tell me what I"m missing.

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Target Price

9/ 10

Confidence

2-6 Months

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