3 ms·
> $120 Billion valuation on $2.6 billion in annual revenue? That number is quarterly revenue (and as you say does not include the share the driver takes)
by ndirish1842 8y ago
> $120 Billion valuation on $2.6 billion in annual revenue?
That number is quarterly revenue (and as you say does not include the share the driver takes)
- arcticbull 8y agoPricing them at 12X net revenue out the gate is pretty aggressive to say the least. Especially when their margins were -60% back in 2016 and in late 2018, and if anything they've gotten worse with the recent price drops. [1, 2] It's not fair to compare them to the negative margins enjoyed by other tech companies as most software companies are zero-marginal-cost businesses. It's far from clear to me that people would pay the double price per ride it would take to break even. A few years ago, if I'm not mistaken, they even switched to counting the entire value of an Uber Pool/Express Pool ride as net revenue (something they don't do with their core product offerings) muddying the water. Does anyone know if that's changed? [3] $120B would price them at the same net revenue multiple as Square ($2.21B/yr @ 25B market cap) while Square has much, much better margins (0% vs -60%) - and is itself widely regarded as not being a cheap buy. [1] https://techcrunch.com/2017/04/14/uber-shares-growing-financials-to-distract-from-negative-publicity/ https://techcrunch.com/2017/04/14/uber-shares-growing-financ... [2] http://nymag.com/intelligencer/2018/12/will-uber-survive-the-next-decade.html http://nymag.com/intelligencer/2018/12/will-uber-survive-the... [3] https://www.bloomberg.com/news/articles/2017-04-14/embattled-uber-reports-strong-sales-growth-as-losses-continue https://www.bloomberg.com/news/articles/2017-04-14/embattled...