Uber Reported Strong Q4; Expects Quarterly GAAP Profitability in 2023; Shares Undervalued

Further strengthening its network effect-based moat, Uber again reported an impressive quarter with year-over-year growth in users, order frequency, and monetization. Top-line growth generated additional operating leverage and margin expansion. We were impressed with management’s confidence in having a profitable quarter, on a GAAP basis, this year which supports our assumption that the firm will hit full-year GAAP profitability in 2024. While Uber’s first-quarter outlook indicates continuing strong growth through 2023, we have lowered our gross bookings and revenue projections modestly as an economic downturn will likely weaken demand.