UBER - Valens Credit Report - 2021 08 27
Credit markets are grossly overstating credit risk with a cash bond YTW of 4.234% relative to an Intrinsic YTW of 1.184% and an Intrinsic CDS of 41bps. Moody's is also materially overstating UBER's fundamental credit risk with its highly speculative B2 credit rating seven notches below Valens' IG4+ (Baa1) credit ratingIncentives Dictate Behavior™ analysis highlights mixed signals for credit holders. UBER's compensation framework should drive them to focus on margin expansion and revenue growth, which may lead to Uniform ROA expansion. Moreover, management members have low change-in-control compensation indicating they are not incentivized to pursue a buyout and are material owners of UBER stock relative to their compensation, indicating they may be 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
We sought to provide investors and company analysts with a source of information that changed all that.
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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