Uber: an undervalued 'free cash flow machine' with potential in autonomous vehicles?

Uber $UBER has struggled for a long time, but its financial results have been growing significantly in recent years. As a result, it's attracted the attention of billionaire investors like Bill Ackman and David Tepper, who see an undervalued opportunity in the stock.

1. Rocketing free cash flow (FCF)

- FCF grows to $6.9 billion in 2024 (vs. $3.36 billion in 2023).

- FCF margin reached 15.7%, showing effective cost management.

-Ackman calledUber $UBER a "highly profitable and cash-generating machine."

2. Uber as a leader in autonomous mobility

- The company sees the AV market opportunity in the US at $1 trillion.

- It has partnered with Waymo and WeRide to develop autonomous vehicles.

- With a huge customer base and strong infrastructure, it has a competitive advantage in this area.

3. Valuations still within reasonable limits

-Shares of $UBER trade at 24 times forward earnings, which is not excessive for a growth technology company.

-$UBER has increased ridership by 19% and continues to expand its food and freight delivery services.

$UBER today represents a combination of growth and value investment. In the short term, it enjoys rapid cash flow improvement, while in the long term it is betting on autonomous mobility as the future of transportation.

Billionaires like Ackman and Tepper see Uber as undervalued and with huge growth potential. If autonomous mobility becomes a reality, today's Uber stock price could be the opportunity of the decade.