Is Uber Now Cheap Enough to Buy Shares?

Uber (NYSE: UBER) is perhaps the most well-known start-up to come out of Silicon Valley in the last 15 years. Used by hundreds of millions around the globe, the ride-sharing, delivery, and mobility platform is entrenched in many cities around the world. But with a rocky corporate history and no consistent profit generation, Uber's stock has struggled to perform ever since going public in 2019, with shares down around 45% since that time period. However, as many smart investors know, a beaten-down stock can be a great opportunity, as long as the business is still set up to succeed over the long term.

With the stock down almost 50% this year, should you consider buying shares of Uber?

As we climb out of the COVID-19 pandemic -- especially in western markets -- Uber has recovered a lot of its mobility riders. In the first quarter of this year, gross bookings (the number of dollars spent on its services) grew 35% year over year to $26.4 billion. This translated to $6.85 billion in revenue, up 136% year over year. Revenue growth is outpacing gross bookings growth because of a reclassification of revenue in the United Kingdom, an acquisition of Transplace for its freight division, and lapping some one-time accruals because of law changes in the United Kingdom. If we look at gross profit, a better measure of top-line growth, it grew 137% year over year in Q1, which shows the higher take-rates Uber is achieving with its mobility, delivery, and freight platforms.

Source Fool.com