Bill Ackman buys 30.3 million shares of Uber Technologies, highlighting its growth and profitability

From Nasdaq: 2025-02-11 10:31:00

Billionaire Bill Ackman, CEO of Pershing Square Capital Management, is known for investing in cash-flowing consumer stocks and making contrarian bets. He invested in Chipotle Mexican Grill in 2016, with the stock up roughly 600% since. He also recently invested in Nike, Hilton Worldwide, Restaurant Brands International, and accumulated 30.3 million shares of Uber Technologies.

Uber underwent a transformation, overcoming setbacks to become profitable by 2023. In 2024, gross bookings grew 18% to $162.8 billion, generating $44 billion in revenue. Uber reported $2.8 billion in GAAP operating income and nearly $7 billion in free cash flow. Membership in Uber One grew by 60% to 30 million.

Uber’s stock looks reasonably priced at a forward P/E of 30. However, the biggest risk is competition from autonomous vehicle technology. Uber has partnered with companies like Waymo and Volvo for autonomous vehicles. Despite the risk, Uber’s growth, profitability, and valuation make it a solid buy.

Investors are sensitive to Tesla’s moves in the autonomous vehicle space, impacting Uber’s stock. Uber’s strategy to integrate autonomous vehicles seems sensible, and its current business model should be safe for the foreseeable future. Keep an eye on autonomous vehicle developments, but Uber looks like a strong buy.

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Read more at Nasdaq: Billionaire Bill Ackman Is Buying Uber Stock. Should You?