Stretched Valuation in Ride-Hailing – Uber’s financials and others

Uber reported some 2018 Q3 quarterly financial numbers on Wednesday.

As similar ride-hailing companies across the globe may go public in the coming 2019-2020, here I compiled some publicly available numbers together.

While Uber’s  revenue growth is slowing down, at least it can target a 2019 full year revenue over $15 billion with 25%+ growth rate (an implied valuation multiple of 8x revenue).

Similar for Lyft – at least it needs an annualized revenue of $3 billion (an implied valuation multiple of 10x revenue), which means ~$750 million per quarter. It seems easier to achieve to me in Lyft’s case.

And Didi… its take rate from GMV is said to be much lower than Uber’s (~23%). Assuming a GMV of ¥120 billion in 2019 and a take rate of 10%, Didi will achieve an annual run rate of ~$1,700 million. Then it will be valued at 50x revenue multiple for a $85 billion valuation…

No comments on specific company. But overall, this space seems to have stretched valuation.

However, some other factors need to be counted in, such as low risk of competition (the market structure is mature or foreseeable I would say), the definite future of transportation-as-a-service (with growing market share in overall transportation), upcoming initiatives (e.g. autonomous car services, autonomous on-demand truck, etc.)

It seems that certain future is coming for sure in many investors’ eyes. Or they are just made to believe in it.


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