UBER held an investor update Wednesday in which they unveiled new three year targets for Gross Bookings, Adjusted EBITDA and Free Cash Flow (on page 18). For Gross Bookings, they forecasted mid to high teens CAGR growth over the next three years. For Adjusted EBITDA, they forecasted high 30% to 40% CAGR over the the same period. And they said that Free Cash Flow as a % of Adjusted EBITDA would be 90%+. In other words, no splashy acquisitions; more financial discipline. The new $7 billion share buyback sends the same message.

Let’s do the calculations and see what the numbers would look like in three years if UBER can execute on this plan. UBER had $138 billion in Gross Bookings in 2023, With an 18% CAGR over the next three years, that would be around $225 billion. If Adjusted EBITDA can increase at a 38% CAGR over the next three years, that would be around $10.5 billion – compared to $4 billion in 2023. In my opinion, these numbers line up with a $200 share price and a $400 billion market cap. In other words, if UBER can execute on the three year guidance it announced yesterday, it would be well on its way to UBER $1 Trillion.

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