Uber(UBER) The Motley Fool·2025-02-26 23:32Core Viewpoint - Bill Ackman, a prominent hedge fund manager, has invested significantly in Uber, believing it to be one of the highest quality businesses globally, with a focus on its strong growth potential and operational efficiencies [3][4][5]. Company Overview - Pershing Square Capital Management, led by Ackman, has acquired over 30 million shares of Uber, amounting to a $2.4 billion stake as of February 21, 2024 [3]. - Uber's operating margin improved to 6.4% in 2024, more than doubling from the previous year, which supports Ackman's projection of over 30% annual EPS growth in the coming years [5]. Financial Performance - Revenue growth for Uber is expected to be in the mid- to high-teens, driven by an increase in customer base and spending per customer [4]. - Consensus analyst estimates for Uber's 2025 EPS have increased by 21% over the past year, while the stock price has only risen by 3% [8]. Competitive Advantage - Uber's network effect creates a strong economic moat, allowing it to maintain a leading position in the industry by efficiently matching rider demand with driver capacity [6][7]. - As of December 31, 2024, Uber had 170 million active users and 8 million drivers across 70 countries, enhancing its operational efficiency [7]. Future Outlook - Ackman believes that advancements in autonomous vehicle (AV) technology pose a long-term threat but sees Uber as a key partner for AV companies due to its established consumer relationships [9][10]. - Collaborations with companies like Tesla or Alphabet's Waymo could facilitate quicker adoption of AV technology through Uber's existing platform [11].