Uber: Sum-of-Parts Highlights The Significant Undervaluation [In-depth]

• Uber’s 4Q19 results highlight an accelerated path to EBITDA profitability.
• Eats is also showing encouraging progress amid a competitive food delivery landscape.
• The market is giving Uber little to no credit for its ability to hit post-FY21 profitability targets.
• Uber's ride-sharing business appears significantly undervalued on a sum-of-parts basis.

While consensus continues to focus on Uber as a premier ride-sharing company, I’d argue that Uber has evolved into a mix of high-quality businesses that remain in investment mode, as well as poor quality businesses that should be divested. The recent Eats India exit confirms the relative ease Uber has in exiting businesses with sub-par unit economics; the fact that management has shown a willingness to divest should further accelerate the path to profitability.