UBER bullish call by Asymmetric Investing by Travis Hoium

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“I wouldn't be surprised if by the end of the decade, Uber is going to have more autonomous vehicles in the fleet fully operating than Whimo does.”

Thesis at the time

Strongly Bullish

Travis argues Uber's apparent revenue slowdown is an accounting artifact from a UK revenue-recognition change, not business weakness, while bookings, margins, and free cash flow are all improving. He believes Uber's aggregator strategy in autonomous vehicles positions it to become a much bigger and more valuable company over the next 5-10 years, with the market eventually re-rating the stock's multiple higher.

Key arguments

Bookings grew 22% in the quarter, reflecting true underlying growth of 20%+ CAGR
UK accounting change (driver payments moved to contra revenue) created an 8-point headwind to reported revenue with zero impact on gross profit, operating profit, or free cash flow
Operating margins and free cash flow are both consistently rising on a trailing 12-month basis
Uber is live with autonomous vehicles in 7 cities, on track for 15 by year-end, positioning itself as the demand aggregator for multiple AV hardware and fleet partners
Stock trades at just ~15-16x earnings and ~10-11x free cash flow, which he views as cheap given growth and margin trends

Counter-arguments acknowledged

Revenue growth on a headline basis decelerated sharply (14.5% then 12.2%) due to the accounting change
Many autonomous vehicle city launches still have safety drivers, so full autonomy is not yet proven at scale

Hedges and caveats (from the video)

Revenue growth deceleration in recent quarters due to UK revenue recognition changes
Autonomous vehicle strategy success is not guaranteed
Market sentiment currently negative on Uber stock post-earnings
Multiple expansion dependent on investor sentiment shift
Analyst acknowledges this is a personal portfolio position with potential for future additions