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Analysts do not know what to do with Uber's $ 100 billion valuation




There are some ways that Uber's appreciation could be justified, according to the analysts interviewed for this article, but right now they are difficult to predict.

DA Davidson Senior Research Analyst Tom White said to justify the $ 100 billion valuation, he looks for three things. First, he will see evidence that Uber could significantly improve its sales growth. Secondly, he will look for signs that the pressure on Uber's margins does not last long. And thirdly, he would try to understand whether investors are willing to pay a premium for Uber compared to Lyft.

Uber has its own riding share business, where it competes directly with Lyft, an opportunity to distinguish itself if one of its other companies takes off. While Lyft has expanded slowly, available in only two countries and focused mainly on ridesharing and other mobility areas, Uber has taken a different approach, expanding to 63 countries and taking on other projects. It might ultimately work well for Uber.

"I think a big focus is shipping and eating. They are important ingredients in the recipe for success," Ives said. "I think the only thing that stood out in S-1[ads1] is how big the revenue and opportunities were in relation to what investors expected." For example, Uber Eats increased gross orders from $ 1.1 billion in the fourth quarter of 2017 to $ 2.6 billion in the fourth quarter of 2018.

Another way to increase profitability is through automation for the Riding Share business. At the moment, Uber only gets a cut on every turn it offers, since drivers are taking a share as well. In addition, it offers steep incentives to both drivers and customers to get them to use their service in a competitive market, which Uber itself has listed as a risk factor for its business. But if the company some day can cut out the driver and use self-driving cars instead, the road to profitability becomes much clearer.

"If autonomous driving one day becomes one thing, it can make that business nicely profitable," Meeks said. But he said that Uber can't lean heavily on it now, since "I don't see it as a common cause for many years."

With a little bit going on, investors are likely to already look at Lyft's performance as uber readies [19659002]

Uber IPO Filing



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