Uber Technologies, Inc.UBERNYSE
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DCF Valuation
DCF Valuation Summary
Strong Buy
Fair Value: $130.36 per share(market-calibrated)
+70.1%
Upside to Fair Value
Current
$76.65
Pure Model
$135.25
Fair Value
$130.36
Bull Case
$186.83
Bear Case
$94.65
Market Reality Check
Model Terminal Growth
3.75%
Market-Implied Growth
1.35%
Calibrated Growth
2.91%
Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $135.25.
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 $99.17/share (18.3x terminal FCF) while exit multiple gives $171.32/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 1.35% perpetual growth — 240bps 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)1.22
Market Risk Premium4.50%
*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)
Cost of Equity (Re)9.97%
Cost of Debt
Pre-tax Cost of Debt3.93%
Tax Rate21.00%
After-tax Cost of Debt3.10%
Equity Weight (E/V)92.19%
Debt Weight (D/V)7.81%
WACC Calculation
WACC = (E/V × Re) + (D/V × Rd × (1-Tc))
WACC = (92.19% × 9.97%) + (7.81% × 3.10%)
= 9.43%
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 | 0.763 | 0.637 | 0.532 | 0.406 |
| Present Value | $4.6B | $5.0B | $5.1B | $7.2B | $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%
WACC9.43%
TV = FCF₁₀ × (1+g) / (WACC-g)
Terminal Value$367.1B
PV of Terminal Value$149.1B
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$298.7B
Valuation Summary
Perpetuity Growth Method
PV of Projected FCFs$62.3B
PV of Terminal Value$149.1B
Enterprise Value$211.4B
(-) Net Debt$5.7B
Equity Value$205.6B
Shares Outstanding2.1B
Price per Share$99.17
Exit Multiple Method
PV of Projected FCFs$62.3B
PV of Terminal Value$298.7B
Enterprise Value$361.0B
(-) Net Debt$5.7B
Equity Value$355.2B
Shares Outstanding2.1B
Price per Share$171.32
Pure Model Fair Value
$135.25
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% |
|---|---|---|---|---|---|
| 7.43% | $169.48 | $175.98 | $184.24 | $195.10 | $210.01 |
| 8.43% | $146.99 | $150.97 | $155.79 | $161.77 | $169.37 |
| 9.43% | $129.57 | $132.18 | $135.25 | $138.90 | $143.35 |
| 10.43% | $115.46 | $117.26 | $119.33 | $121.73 | $124.56 |
| 11.43% | $103.69 | $104.98 | $106.43 | $108.09 | $110.00 |
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
$94.65
23.5% vs current
- • -25% vs analyst consensus
- • Terminal growth: 3.3%
- • Beta: 1.52
Base Case
$135.25
76.4% vs current
- • Analyst consensus
- • Terminal growth: 3.8%
- • Beta: 1.22
Bull Case
$186.83
143.7% 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.