Stock Analysis on Net

Uber Technologies Inc. (NYSE:UBER)

Capital Asset Pricing Model (CAPM)

Microsoft Excel

Capital asset pricing model (CAPM) indicates what should be the expected or required rate of return on risky assets like Uber Technologies Inc. common stock.


Rates of Return

Uber Technologies Inc., monthly rates of return

Microsoft Excel
Uber Technologies Inc. (UBER) Standard & Poor’s 500 (S&P 500)
t Date PriceUBER,t1 DividendUBER,t1 RUBER,t2 PriceS&P 500,t RS&P 500,t3
May 31, 2019 $40.41 2,752.06
1. Jun 30, 2019 $46.38 14.77% 2,941.76 6.89%
2. Jul 31, 2019 $42.14 -9.14% 2,980.38 1.31%
3. Aug 31, 2019 $32.57 -22.71% 2,926.46 -1.81%
. . . . . . .
. . . . . . .
. . . . . . .
54. Nov 30, 2023 $56.38 30.27% 4,567.80 8.92%
55. Dec 31, 2023 $61.57 9.21% 4,769.83 4.42%
Average (R): 1.68% 1.15%
Standard deviation: 14.05% 5.38%
Uber Technologies Inc. (UBER) Standard & Poor’s 500 (S&P 500)
t Date PriceUBER,t1 DividendUBER,t1 RUBER,t2 PriceS&P 500,t RS&P 500,t3
May 31, 2019 $40.41 2,752.06
1. Jun 30, 2019 $46.38 14.77% 2,941.76 6.89%
2. Jul 31, 2019 $42.14 -9.14% 2,980.38 1.31%
3. Aug 31, 2019 $32.57 -22.71% 2,926.46 -1.81%
4. Sep 30, 2019 $30.47 -6.45% 2,976.74 1.72%
5. Oct 31, 2019 $31.50 3.38% 3,037.56 2.04%
6. Nov 30, 2019 $29.60 -6.03% 3,140.98 3.40%
7. Dec 31, 2019 $29.74 0.47% 3,230.78 2.86%
8. Jan 31, 2020 $36.29 22.02% 3,225.52 -0.16%
9. Feb 29, 2020 $33.87 -6.67% 2,954.22 -8.41%
10. Mar 31, 2020 $27.92 -17.57% 2,584.59 -12.51%
11. Apr 30, 2020 $30.27 8.42% 2,912.43 12.68%
12. May 31, 2020 $36.32 19.99% 3,044.31 4.53%
13. Jun 30, 2020 $31.08 -14.43% 3,100.29 1.84%
14. Jul 31, 2020 $30.26 -2.64% 3,271.12 5.51%
15. Aug 31, 2020 $33.63 11.14% 3,500.31 7.01%
16. Sep 30, 2020 $36.48 8.47% 3,363.00 -3.92%
17. Oct 31, 2020 $33.41 -8.42% 3,269.96 -2.77%
18. Nov 30, 2020 $49.66 48.64% 3,621.63 10.75%
19. Dec 31, 2020 $51.00 2.70% 3,756.07 3.71%
20. Jan 31, 2021 $50.93 -0.14% 3,714.24 -1.11%
21. Feb 28, 2021 $51.75 1.61% 3,811.15 2.61%
22. Mar 31, 2021 $54.51 5.33% 3,972.89 4.24%
23. Apr 30, 2021 $54.77 0.48% 4,181.17 5.24%
24. May 31, 2021 $50.83 -7.19% 4,204.11 0.55%
25. Jun 30, 2021 $50.12 -1.40% 4,297.50 2.22%
26. Jul 31, 2021 $43.46 -13.29% 4,395.26 2.27%
27. Aug 31, 2021 $39.14 -9.94% 4,522.68 2.90%
28. Sep 30, 2021 $44.80 14.46% 4,307.54 -4.76%
29. Oct 31, 2021 $43.82 -2.19% 4,605.38 6.91%
30. Nov 30, 2021 $38.00 -13.28% 4,567.00 -0.83%
31. Dec 31, 2021 $41.93 10.34% 4,766.18 4.36%
32. Jan 31, 2022 $37.40 -10.80% 4,515.55 -5.26%
33. Feb 28, 2022 $36.03 -3.66% 4,373.94 -3.14%
34. Mar 31, 2022 $35.68 -0.97% 4,530.41 3.58%
35. Apr 30, 2022 $31.48 -11.77% 4,131.93 -8.80%
36. May 31, 2022 $23.20 -26.30% 4,132.15 0.01%
37. Jun 30, 2022 $20.46 -11.81% 3,785.38 -8.39%
38. Jul 31, 2022 $23.45 14.61% 4,130.29 9.11%
39. Aug 31, 2022 $28.76 22.64% 3,955.00 -4.24%
40. Sep 30, 2022 $26.50 -7.86% 3,585.62 -9.34%
41. Oct 31, 2022 $26.57 0.26% 3,871.98 7.99%
42. Nov 30, 2022 $29.14 9.67% 4,080.11 5.38%
43. Dec 31, 2022 $24.73 -15.13% 3,839.50 -5.90%
44. Jan 31, 2023 $30.93 25.07% 4,076.60 6.18%
45. Feb 28, 2023 $33.26 7.53% 3,970.15 -2.61%
46. Mar 31, 2023 $31.70 -4.69% 4,109.31 3.51%
47. Apr 30, 2023 $31.05 -2.05% 4,169.48 1.46%
48. May 31, 2023 $37.93 22.16% 4,179.83 0.25%
49. Jun 30, 2023 $43.17 13.81% 4,376.86 4.71%
50. Jul 31, 2023 $49.46 14.57% 4,588.96 4.85%
51. Aug 31, 2023 $47.23 -4.51% 4,507.66 -1.77%
52. Sep 30, 2023 $45.99 -2.63% 4,288.05 -4.87%
53. Oct 31, 2023 $43.28 -5.89% 4,193.80 -2.20%
54. Nov 30, 2023 $56.38 30.27% 4,567.80 8.92%
55. Dec 31, 2023 $61.57 9.21% 4,769.83 4.42%
Average (R): 1.68% 1.15%
Standard deviation: 14.05% 5.38%

Show all

1 Data in US$ per share of common stock, adjusted for splits and stock dividends.

2 Rate of return on common stock of UBER during period t

3 Rate of return on S&P 500 (the market portfolio proxy) during period t


Variance and Covariance

Uber Technologies Inc., calculation of variance and covariance of returns

Microsoft Excel
t Date RUBER,t RS&P 500,t (RUBER,tRUBER)2 (RS&P 500,tRS&P 500)2 (RUBER,tRUBER)×(RS&P 500,tRS&P 500)
1. Jun 30, 2019 14.77% 6.89% 171.40 33.01 75.22
2. Jul 31, 2019 -9.14% 1.31% 117.15 0.03 -1.79
3. Aug 31, 2019 -22.71% -1.81% 594.95 8.74 72.12
. . . . . . .
. . . . . . .
. . . . . . .
54. Nov 30, 2023 30.27% 8.92% 817.19 60.38 222.12
55. Dec 31, 2023 9.21% 4.42% 56.61 10.73 24.64
Total (Σ): 10,652.59 1,563.23 2,089.17
t Date RUBER,t RS&P 500,t (RUBER,tRUBER)2 (RS&P 500,tRS&P 500)2 (RUBER,tRUBER)×(RS&P 500,tRS&P 500)
1. Jun 30, 2019 14.77% 6.89% 171.40 33.01 75.22
2. Jul 31, 2019 -9.14% 1.31% 117.15 0.03 -1.79
3. Aug 31, 2019 -22.71% -1.81% 594.95 8.74 72.12
4. Sep 30, 2019 -6.45% 1.72% 66.08 0.33 -4.64
5. Oct 31, 2019 3.38% 2.04% 2.89 0.80 1.52
6. Nov 30, 2019 -6.03% 3.40% 59.50 5.09 -17.41
7. Dec 31, 2019 0.47% 2.86% 1.46 2.93 -2.07
8. Jan 31, 2020 22.02% -0.16% 413.82 1.72 -26.66
9. Feb 29, 2020 -6.67% -8.41% 69.72 91.37 79.82
10. Mar 31, 2020 -17.57% -12.51% 370.51 186.59 262.93
11. Apr 30, 2020 8.42% 12.68% 45.36 133.09 77.70
12. May 31, 2020 19.99% 4.53% 335.08 11.43 61.88
13. Jun 30, 2020 -14.43% 1.84% 259.50 0.48 -11.13
14. Jul 31, 2020 -2.64% 5.51% 18.66 19.03 -18.85
15. Aug 31, 2020 11.14% 7.01% 89.40 34.32 55.40
16. Sep 30, 2020 8.47% -3.92% 46.15 25.71 -34.44
17. Oct 31, 2020 -8.42% -2.77% 101.95 15.32 39.52
18. Nov 30, 2020 48.64% 10.75% 2,204.92 92.29 451.10
19. Dec 31, 2020 2.70% 3.71% 1.03 6.58 2.61
20. Jan 31, 2021 -0.14% -1.11% 3.31 5.11 4.11
21. Feb 28, 2021 1.61% 2.61% 0.01 2.14 -0.10
22. Mar 31, 2021 5.33% 4.24% 13.34 9.59 11.31
23. Apr 30, 2021 0.48% 5.24% 1.45 16.77 -4.93
24. May 31, 2021 -7.19% 0.55% 78.77 0.36 5.32
25. Jun 30, 2021 -1.40% 2.22% 9.48 1.15 -3.31
26. Jul 31, 2021 -13.29% 2.27% 224.09 1.27 -16.87
27. Aug 31, 2021 -9.94% 2.90% 135.06 3.07 -20.35
28. Sep 30, 2021 14.46% -4.76% 163.31 34.87 -75.46
29. Oct 31, 2021 -2.19% 6.91% 14.97 33.25 -22.31
30. Nov 30, 2021 -13.28% -0.83% 223.90 3.92 29.64
31. Dec 31, 2021 10.34% 4.36% 75.01 10.33 27.83
32. Jan 31, 2022 -10.80% -5.26% 155.88 41.04 79.98
33. Feb 28, 2022 -3.66% -3.14% 28.57 18.35 22.90
34. Mar 31, 2022 -0.97% 3.58% 7.04 5.90 -6.45
35. Apr 30, 2022 -11.77% -8.80% 180.98 98.87 133.77
36. May 31, 2022 -26.30% 0.01% 783.10 1.31 31.97
37. Jun 30, 2022 -11.81% -8.39% 182.03 91.01 128.71
38. Jul 31, 2022 14.61% 9.11% 167.24 63.42 102.99
39. Aug 31, 2022 22.64% -4.24% 439.42 29.07 -113.02
40. Sep 30, 2022 -7.86% -9.34% 91.01 109.98 100.05
41. Oct 31, 2022 0.26% 7.99% 2.01 46.77 -9.69
42. Nov 30, 2022 9.67% 5.38% 63.86 17.87 33.78
43. Dec 31, 2022 -15.13% -5.90% 282.76 49.63 118.46
44. Jan 31, 2023 25.07% 6.18% 547.05 25.28 117.59
45. Feb 28, 2023 7.53% -2.61% 34.24 14.13 -22.00
46. Mar 31, 2023 -4.69% 3.51% 40.60 5.56 -15.02
47. Apr 30, 2023 -2.05% 1.46% 13.93 0.10 -1.18
48. May 31, 2023 22.16% 0.25% 419.28 0.81 -18.42
49. Jun 30, 2023 13.81% 4.71% 147.22 12.72 43.27
50. Jul 31, 2023 14.57% 4.85% 166.12 13.68 47.67
51. Aug 31, 2023 -4.51% -1.77% 38.32 8.52 18.07
52. Sep 30, 2023 -2.63% -4.87% 18.55 36.24 25.93
53. Oct 31, 2023 -5.89% -2.20% 57.37 11.19 25.34
54. Nov 30, 2023 30.27% 8.92% 817.19 60.38 222.12
55. Dec 31, 2023 9.21% 4.42% 56.61 10.73 24.64
Total (Σ): 10,652.59 1,563.23 2,089.17

Show all

VarianceUBER = Σ(RUBER,tRUBER)2 ÷ (55 – 1)
= 10,652.59 ÷ (55 – 1)
= 197.27

VarianceS&P 500 = Σ(RS&P 500,tRS&P 500)2 ÷ (55 – 1)
= 1,563.23 ÷ (55 – 1)
= 28.95

CovarianceUBER, S&P 500 = Σ(RUBER,tRUBER)×(RS&P 500,tRS&P 500) ÷ (55 – 1)
= 2,089.17 ÷ (55 – 1)
= 38.69


Systematic Risk (β) Estimation

Microsoft Excel
VarianceUBER 197.27
VarianceS&P 500 28.95
CovarianceUBER, S&P 500 38.69
Correlation coefficientUBER, S&P 5001 0.51
βUBER2 1.34
αUBER3 0.15%

Calculations

1 Correlation coefficientUBER, S&P 500
= CovarianceUBER, S&P 500 ÷ (Standard deviationUBER × Standard deviationS&P 500)
= 38.69 ÷ (14.05% × 5.38%)
= 0.51

2 βUBER
= CovarianceUBER, S&P 500 ÷ VarianceS&P 500
= 38.69 ÷ 28.95
= 1.34

3 αUBER
= AverageUBER – βUBER × AverageS&P 500
= 1.68%1.34 × 1.15%
= 0.15%


Expected Rate of Return

Microsoft Excel
Assumptions
Rate of return on LT Treasury Composite1 RF 4.65%
Expected rate of return on market portfolio2 E(RM) 13.79%
Systematic risk (β) of Uber Technologies Inc. common stock βUBER 1.34
 
Expected rate of return on Uber Technologies Inc. common stock3 E(RUBER) 16.86%

1 Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or callable in less than 10 years (risk-free rate of return proxy).

2 See details »

3 E(RUBER) = RF + βUBER [E(RM) – RF]
= 4.65% + 1.34 [13.79%4.65%]
= 16.86%