Stock Analysis on Net
Stock Analysis on Net

Uber Technologies Inc. (NYSE:UBER)

Present Value of Free Cash Flow to the Firm (FCFF)

Microsoft Excel

In discounted cash flow (DCF) valuation techniques the value of the stock is estimated based upon present value of some measure of cash flow. Free cash flow to the firm (FCFF) is generally described as cash flows after direct costs and before any payments to capital suppliers.

Intrinsic Stock Value (Valuation Summary)

Uber Technologies Inc., free cash flow to the firm (FCFF) forecast

US$ in millions, except per share data

Microsoft Excel
Year Value FCFFt or Terminal value (TVt) Calculation Present value at 15.67%
01 FCFF0 3,717
1 FCFF1 3,084 = 3,717 × (1 + -17.03%) 2,666
2 FCFF2 2,790 = 3,084 × (1 + -9.54%) 2,085
3 FCFF3 2,733 = 2,790 × (1 + -2.05%) 1,766
4 FCFF4 2,881 = 2,733 × (1 + 5.44%) 1,610
5 FCFF5 3,254 = 2,881 × (1 + 12.93%) 1,572
5 Terminal value (TV5) 134,098 = 3,254 × (1 + 12.93%) ÷ (15.67% – 12.93%) 64,764
Intrinsic value of Uber Technologies Inc. capital 74,462
Less: Long-term debt and finance leases liabilities (fair value) 9,800
Intrinsic value of Uber Technologies Inc. common stock 64,662
 
Intrinsic value of Uber Technologies Inc. common stock (per share) $31.14
Current share price $69.05

Based on: 10-K (reporting date: 2023-12-31).

1 See details »

Disclaimer!
Valuation is based on standard assumptions. There may exist specific factors relevant to stock value and omitted here. In such a case, the real stock value may differ significantly form the estimated. If you want to use the estimated intrinsic stock value in investment decision making process, do so at your own risk.

Weighted Average Cost of Capital (WACC)

Uber Technologies Inc., cost of capital

Microsoft Excel
Value1 Weight Required rate of return2 Calculation
Equity (fair value) 143,382 0.94 16.44%
Long-term debt and finance leases liabilities (fair value) 9,800 0.06 4.42% = 5.30% × (1 – 16.58%)

Based on: 10-K (reporting date: 2023-12-31).

1 US$ in millions

   Equity (fair value) = No. shares of common stock outstanding × Current share price
= 2,076,497,400 × $69.05
= $143,382,145,470.00

   Long-term debt and finance leases liabilities (fair value). See details »

2 Required rate of return on equity is estimated by using CAPM. See details »

   Required rate of return on debt. See details »

   Required rate of return on debt is after tax.

   Estimated (average) effective income tax rate
= (9.20% + 1.90% + 48.00% + 2.80% + 21.00%) ÷ 5
= 16.58%

WACC = 15.67%

FCFF Growth Rate (g)

FCFF growth rate (g) implied by PRAT model

Uber Technologies Inc., PRAT model

Microsoft Excel
Average Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Interest expense 633 565 483 458 559
Net income (loss) attributable to Uber Technologies, Inc. 1,887 (9,141) (496) (6,768) (8,506)
 
Effective income tax rate (EITR)1 9.20% 1.90% 48.00% 2.80% 21.00%
 
Interest expense, after tax2 575 554 251 445 442
Interest expense (after tax) and dividends 575 554 251 445 442
 
EBIT(1 – EITR)3 2,462 (8,587) (245) (6,323) (8,064)
 
Current portion of long-term debt 25 27 27 27 27
Finance leases liabilities, current 156 115 191 177 165
Long-term debt, net of current portion 9,459 9,265 9,276 7,560 5,707
Finance leases liabilities, non-current 322 284 43 120 143
Total Uber Technologies, Inc. stockholders’ equity 11,249 7,340 14,458 12,266 14,190
Total capital 21,211 17,031 23,995 20,150 20,232
Financial Ratios
Retention rate (RR)4 0.77 — — — —
Return on invested capital (ROIC)5 11.61% -50.42% -1.02% -31.38% -39.86%
Averages
RR 0.77
ROIC -22.21%
 
FCFF growth rate (g)6 -17.03%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 See details »

2023 Calculations

2 Interest expense, after tax = Interest expense × (1 – EITR)
= 633 × (1 – 9.20%)
= 575

3 EBIT(1 – EITR) = Net income (loss) attributable to Uber Technologies, Inc. + Interest expense, after tax
= 1,887 + 575
= 2,462

4 RR = [EBIT(1 – EITR) – Interest expense (after tax) and dividends] ÷ EBIT(1 – EITR)
= [2,462 – 575] ÷ 2,462
= 0.77

5 ROIC = 100 × EBIT(1 – EITR) ÷ Total capital
= 100 × 2,462 ÷ 21,211
= 11.61%

6 g = RR × ROIC
= 0.77 × -22.21%
= -17.03%

FCFF growth rate (g) implied by single-stage model

g = 100 × (Total capital, fair value0 × WACC – FCFF0) ÷ (Total capital, fair value0 + FCFF0)
= 100 × (153,182 × 15.67% – 3,717) ÷ (153,182 + 3,717)
= 12.93%

where:

Total capital, fair value0 = current fair value of Uber Technologies Inc. debt and equity (US$ in millions)
FCFF0 = the last year Uber Technologies Inc. free cash flow to the firm (US$ in millions)
WACC = weighted average cost of Uber Technologies Inc. capital

FCFF growth rate (g) forecast

Uber Technologies Inc., H-model

Microsoft Excel
Year Value gt
1 g1 -17.03%
2 g2 -9.54%
3 g3 -2.05%
4 g4 5.44%
5 and thereafter g5 12.93%

where:
g1 is implied by PRAT model
g5 is implied by single-stage model
g2, g3 and g4 are calculated using linear interpoltion between g1 and g5

Calculations

g2 = g1 + (g5 – g1) × (2 – 1) ÷ (5 – 1)
= -17.03% + (12.93% – -17.03%) × (2 – 1) ÷ (5 – 1)
= -9.54%

g3 = g1 + (g5 – g1) × (3 – 1) ÷ (5 – 1)
= -17.03% + (12.93% – -17.03%) × (3 – 1) ÷ (5 – 1)
= -2.05%

g4 = g1 + (g5 – g1) × (4 – 1) ÷ (5 – 1)
= -17.03% + (12.93% – -17.03%) × (4 – 1) ÷ (5 – 1)
= 5.44%