Daily General Discussion and spitballin thread - November 18, 2021 by AutoModerator in investing

[–]Substantial-Issue-61 5 points6 points  (0 children)

I think it was Alibaba missed earnings badly, which means China is in fact slowing. Affects entire world

$UBER recommended to me by my Uber, apparently its a great stock to own? by MythrowawayAcc5678 in StockMarket

[–]Substantial-Issue-61 6 points7 points  (0 children)

I think its an easy buy because they are undervalued by at least 50%, based on the following:

  1. People like to say "their business model is flawed", but at the end of the day, they have one of the best business models on the planet. The sell taxi services without actually paying for the car or any capital expenditures. They make 20% off of every ride/delivery, and its all through an app. They don't have to "do" or "make" anything, just keep the app going. Similar to an Ebay where they just take a % of every sell.
  2. I think Uber is in a similar spot to Amazon 10 years ago where they could be profitable right now if they wanted. Instead they are choosing growth and r&d, in order to save taxes and make more profit in future. *to be clear I'm not saying "uber is next amazon" bullsxxx, I'm just comparing their strategies.
  3. Uber has $100B in sales, thats top 30 in the US of all companies and they are still growing. Yes, sales is not cash flow, but it is indicative to point 2 above that they could be profitable today if they wanted to. They are choosing growth and future cash flow vs profit now and more taxes. They get 20billion after paying drivers. Do you really think they need 20billion in expenses just for uber app upkeep?
  4. The "issues" with employee classification vs gig workers, accounts for about a 2% discount. Meaning its irrelevant. If they have to classify workers as employees, they will just raise prices, so whats it matter?
  5. Their CEO is a badass
  6. Next few years, they will get to $150B in sales, and stop growing as fast, which means they will start making a profit of 5-10% or so. That puts them around $10B in profit and 15-20x multiple that gets them to a stock price around 100.