Why wouldn’t they? However, Yahoo! Finance is taking things to a whole new different perspective, sharing their reasons why they’re fans of Uber and why they’re willing to financially invest in this company.
“The past six months have been a windfall for Uber’s shareholders. The company’s stock price has jumped 47.3 percent, hitting $96.67 per share. This was partly thanks to its solid quarterly results, and the run-up might have investors contemplating their next move,” wrote Petr Huřťák from Yahoo! Finance. Yahoo! Finance is one of the sub-publications of Yahoo! This is centered on business, finance, markets, and the like.
Reason #1: Monthly active consumers on the app skyrocket
When these individuals skyrocket on the app, growth opportunities emerge. True enough. In the arena of the gig economy, the ridesharing app generates profits through the expansion of the app’s services, as well as raising the commission fee from each of the services it provides.
These are attractive for its monthly active consumers, which is why the number here has increased to around 14 percent yearly to 180 million the latest quarter. How about that!
“This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction,” said Huřťák.
Reason #2: Thank you to the remarkable long-term earnings per share growth
Uber’s earnings per share is also on a roll. EPS is a key profitability metric representing the portion of the company’s profile allocated to each outstanding share of common stock.
Sounds confusing? In other words, earnings per share is calculated by dividing net income – after subtracting preferred dividends – by the number of outstanding common shares on average. Higher EPS means good news for investors.
“We track the change in earnings per share (EPS) because it highlights whether a company’s growth is profitable,” added Huřťák.
What does Uber’s statistics say? Uber’s EPS expanded at a whopping 151 percent compounded yearly growth rate over the last three years, higher than expected. This only goes to show that the company’s profitability is for the books.
Reason #3: Increasing free cash flow margin is a fruit to eat
Uber’s increasing free cash flow margin is also showing a lot of promise.
“If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills,” Huřťák pointed out.
The figures show it all. Uber’s margin here expanded by 15.4 percentage points over the last few years. Encouraging? Yes, since also it has become a less capital-focused business due to the free cash flow profitability increase.
“These are just a few reasons Uber is a rock-solid business worth owning, and after the recent rally, the stock trades at 21× forward EV/EBITDA (or $96.67 per share),” Huřťák wrote.
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