Uber Earnings: Network Effect Continues to Drive Profitable Growth for Uber

We are maintaining our $80 fair value estimate for narrow-moat Uber after the firm kicked off fiscal 2024 with strong financial results. As in previous quarters, we view Uber as a firm on top of its game, executing strongly on its business model while posting year-over-year growth in bookings, audience, frequency, and profitability. Beyond quarterly results, we believe that the network effect moat source, a leaner operation, and continuing gross bookings and revenue growth are likely to create further operating leverage and drive impressive 20%-40% average annual adjusted EBITDA growth the next three years. With shares selling off after the earnings report, likely due to the financial results not meeting near-term investor expectations, we view the stock as undervalued relative to our unchanged fair value estimate.