UBER – Market expectations are for Uniform ROA to inflect positively, but management may have concerns about demand, delivery commission caps, and product innovation

Uber Technologies (UBER) currently trades at a premium to Uniform assets, with a 7.8x Uniform P/B (V/A′).

At these levels, markets are pricing in expectations for Uniform ROA to inflect positively to 25%, accompanied by 12% Uniform asset growth going forward.

Similarly, analysts expect Uniform ROA to improve to 8% by 2022, accompanied by 21% Uniform asset growth.

If sustained going forward, these levels would suggest significant potential equity downside. That said, as an early-stage growth name, it is not uncommon to see expectations for a material positive inflection.

Moreover, the firm’s most recent earnings call suggests management may have concerns about demand, delivery commission caps, and product innovation.