Uber Technologies, Inc.UBERNYSE

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DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $130.78 per share(market-calibrated)

+71.3%

Upside to Fair Value

Current

$76.36

Pure Model

$135.95

Fair Value

$130.78

Bull Case

$187.83

Bear Case

$95.17

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

1.23%

Calibrated Growth

2.87%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $135.95.

What's Driving This Ratingfor UBER

✓

CapEx already efficient

CapEx at 0.52% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 11.00% — below the sector mature average of 25.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $24.4B (20.41% margin).

↑

Strong near-term revenue growth

Analyst consensus projects 12.21% revenue growth in Year 1, fading to 8.86% by Year 5 and 3.75% by Year 10. Revenue reaches $119.4B by Year 10 (vs $52.0B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $99.99/share (18.4x terminal FCF) while exit multiple gives $171.91/share (36.6x terminal FCF). The 28x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.75% growth is more conservative. The base case averages both methods.

🎯

Market pricing in lower growth than model

The market implies only 1.23% perpetual growth — 252bps below the model's 3.75%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 76.52% indicates efficient cash generation. FCF reaches $20.1B by Year 10 (16.84% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.21

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.93%

Cost of Debt

Pre-tax Cost of Debt3.93%

Tax Rate21.00%

After-tax Cost of Debt3.10%

Equity Weight (E/V)92.16%

Debt Weight (D/V)7.84%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (92.16% × 9.93%) + (7.84% × 3.10%)

= 9.39%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$58.4B	$75.3B	$90.1B	$103.8B	$119.4B
EBIT	$6.4B	$8.3B	$9.9B	$16.6B	$24.4B
Tax	$1.3B	$1.7B	$2.1B	$3.5B	$5.1B
NOPAT	$5.1B	$6.5B	$7.8B	$13.2B	$19.2B
+ Depreciation	$933M	$1.2B	$1.4B	$1.7B	$1.9B
- Capex	$303M	$391M	$468M	$539M	$620M
- Δ NWC	$635M	$841M	$733M	$662M	$431M
Free Cash Flow	$5.1B	$6.5B	$8.1B	$13.6B	$20.1B
Discount Factor	0.914	0.764	0.638	0.533	0.408
Present Value	$4.6B	$5.0B	$5.2B	$7.3B	$8.2B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$20.1B

Terminal Growth Rate3.75%

WACC9.39%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$369.7B

PV of Terminal Value$150.6B

Exit Multiple Method

Year 10 EBITDA$26.3B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$735.6B

PV of Terminal Value$299.8B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$62.4B

PV of Terminal Value$150.6B

Enterprise Value$213.1B

(-) Net Debt$5.7B

Equity Value$207.3B

Shares Outstanding2.1B

Price per Share$99.99

Exit Multiple Method

PV of Projected FCFs$62.4B

PV of Terminal Value$299.8B

Enterprise Value$362.2B

(-) Net Debt$5.7B

Equity Value$356.4B

Shares Outstanding2.1B

Price per Share$171.91

Pure Model Fair Value

$135.95

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
7.39%	$170.50	$177.14	$185.60	$196.75	$212.12
8.39%	$147.76	$151.81	$156.73	$162.83	$170.61
9.39%	$130.18	$132.83	$135.95	$139.67	$144.20
10.39%	$115.96	$117.79	$119.89	$122.33	$125.20
11.39%	$104.11	$105.42	$106.89	$108.58	$110.51

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$95.17

24.6% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.51

Base Case

$135.95

78.0% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 1.21

Bull Case

$187.83

146.0% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 1.03

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth12.21%

Year 3 Revenue Growth12.57%

Year 5 Revenue Growth8.86%

Year 7 Revenue Growth6.81%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin11.00%

Terminal EBIT Margin25.00%

Tax Rate21.00%

Historical Capex / Rev0.52%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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