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Will Uber Technologies (UBER) Be The Next Amazon?

RiverPark Advisors an independently-owned investment firm, recently published its first-quarter RiverPark Long/Short Opportunity Fund commentary. During the first quarter of 2020, the RiverPark Long/Short Opportunity Fund returned 9.48% (institutional shares), compared to the total return of -19.60% by the S&P 500 Index. You should check out RiverPark’s top 5 stock picks which helped them beat the market by nearly 30 percentage points. There weren’t a lot of funds who could deliver these kinds of returns without shorting the market or using aggressive put options.

In the said letter, RiverPark Advisors highlighted a few stocks and Uber Technologies Inc (NYSE:UBER) is one of them. Uber Technologies is a ride-sharing company. Year-to-date, UBER stock gained 0.2% and on May 6th it had a closing price of $27.82. Its market cap is of $51.7 billion. Here is what RiverPark Advisors said:

“Uber Technologies is the undisputed global leader in ride sharing, with greater than 50% share in every major region where it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. We view Uber as more than just ride sharing and food delivery, but as a global platform with the ability to sell to its 103 million active users (by comparison, Amazon Prime has 130+ million members), as well as penetrate new markets of on-demand services, such as grocery delivery, truck brokerage and worker staffing for shift work.

Uber’s combined businesses drove 26% revenue growth last year to $14 billion, almost entirely from ridesharing (77% of revenue) and food delivery (22%). These businesses have large markets at $3 trillion and about $700 billion (outside of China), respectively. UBER, at its current $45 billion market capitalization, trades at only 3x this year’s revenue from its two core businesses. Additionally, the company has value in its nascent businesses, $5 billion of net cash and another $12 billion in equity stakes in synergistic businesses around the world.”

As you can see RiverPark believes UBER has the potential to be the next Amazon.com Inc. (NASDAQ:AMZN) by cleverly using its global platform. In Q4 2019, the number of bullish hedge fund positions on UBER stock increased by about 96% from the previous quarter (see the chart here), so dozens of other hedge fund managers seem to agree with UBER’s huge upside potential.

Disclosure: None. This article is originally published at Insider Monkey.

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