TSLA251003C470000

I think $Uber Tech(UBER.US) looks compelling here.

At ~$76, I think fair value is closer to $120.

The numbers are pretty compelling:

- Uber generated ~$9.8B of FCF in 2025, up 42% YoY

- Consensus has FCF reaching ~$11B in 2026 and ~$13B in 2027

- Uber now has 200M+ monthly users and processes 40M+ trips per day

- Uber trades around 12x projected 2027 FCF despite FCF still expected to grow ~18% that year

The obvious reason for the discount is autonomous vehicles. The market is worried Waymo/Tesla eventually disintermediate Uber.

I think the opposite outcome could be underpriced: Uber becomes the demand, distribution and payments layer connecting hundreds of millions of consumers with AV fleets. I am not fully sold on this thesis…but what if that’s how it plays out? Would Uber not be the most obvious name trading at an irrationally priced discount?

Uber has 200M+ monthly users and enormous existing demand. An AV manufacturer has to build the cars, operate the fleet, maintain them, reposition them, and then somehow acquire millions of riders.

That’s why I find the valuation interesting here.

You aren’t paying 30x FCF and hoping Uber wins AV…you’re paying roughly 12x 2027 FCF for the existing business and getting the possibility that Uber becomes a major AV distribution layer.

If AVs destroy Uber’s moat, the discount makes sense, the question is if that will actually happen.

Using roughly $13B of 2027 FCF:

Bear case: 17x FCF → $108

Base case: 19x FCF → $120/share

Bull case: 22x FCF → $140/share

No position yet but the risk/reward is compelling.

Source: amit