UBER - Valens Credit Report - 2022 08 25
Credit markets are grossly overstating credit risk with a YTW of 6.409% relative to an Intrinsic YTW of 3.579%, while CDS markets are materially overstating UBER's credit risk with a CDS of 262bps relative to an Intrinsic CDS of 52bps. In addition, Moody's is materially overstating UBER's fundamental credit risk with its highly speculative B1 credit rating six notches below Valens' IG4+ (Baa1) credit rating.Incentives Dictate Behavior™ analysis highlights positive signals for credit holders. UBER's compensation framework should drive them to focus on margin expansion and revenue growth, which should lead to Uniform ROA expansion. Moreover, management members have low change-in-control compensation indicating they are not incentivized to pursue a buyout. Finally, most management members are material owners of UBER equity relative to their annual compensation, indicating they are well-aligned with shareholders for long-term value creation.
Uber Technologies provides ride hailing services. The company develops application for road transportation, navigation, ride sharing, and payment processing solutions. The company serves customers in the United States and Canada, Latin America, Europe, Middle East, and Asia Pacific markets, excluding its discontinued China operations.
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- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
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Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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