A growth stock that has recently added value to my retirement portfolio is Above (NYSE: UBER). Over the past 12 months, the stock price has risen by about 65% in US dollar terms (the company is listed in the US).

However, I remain very optimistic. In fact, this is one of my top stock ideas for the next decade.

A fast-growing company

From an investment perspective, I think this company has a lot of good things to offer.

Currently, Uber’s revenue is growing rapidly as the company expands into new markets (16% growth is expected this year). Not only is the company entering new geographic markets, but it is also adding entirely new features to its app, such as the ability to book train tickets.

Just last week I booked a train ride from London to Southampton using the Uber app. The bonus was that I received a 10% credit that I can use towards car journeys with the company.

But it’s not just revenues that are rising, profits are too. This year, Uber’s earnings per share are expected to rise by 11% to $1.03. Next year, Wall Street analysts expect growth of a whopping 114%. This profit growth – one reason for the rising share price – is being driven by CEO Dara Khosrowshahi’s focus on efficiency.

Enormous long-term potential

Looking to the future, this is where things get really exciting. Self-driving taxis (“robot taxis”) will likely be a common transportation option in the future (they are already on the streets in some US cities), and Uber is expected to play a major role in this industry.

Since the company already has a well-established mobility app with around 150 million users worldwide, it offers the perfect platform for any automaker with autonomous vehicle (AV) technology looking to enter the robo-taxi space.

As CEO Dara Khosrowshahi recently said on the company’s second quarter conference call: “In short, Uber is uniquely positioned to provide tremendous value to AV companies looking to deploy their technology at scale. Uber can meet enormous demand without requiring AV companies to invest capital in acquiring customers or building a market technology that delivers the reliability consumers expect.”

I am therefore convinced that there is enormous potential for growth here.

I expect bumps in the road

I’d like to point out that while I’m very bullish on Uber, I don’t expect the company’s stock price to rise in a straight line over the next decade. I expect it to be a bumpy ride.

In the short term, the company could see a decline in growth if consumer spending continues to weaken (the good news in this case is that Uber tends to serve affluent consumers).

The story continues

In the long term, however, my robo-taxi thesis is in danger. TeslaFor example, you could try to start your own AV taxi service.

Another issue to be aware of is regulatory intervention. This company is often targeted by regulators due to its disruptive nature.

However, from a long-term perspective, I’m very excited about this stock. With Uber’s market cap only being $155 billion today, I see a lot of room for growth in the coming years.

I plan to continue buying the stock – which currently has a P/E ratio of 33 based on 2025 earnings forecast – on any declines.

The post Up 65% in a year, this is one of my top growth stocks for the next decade appeared first on The Motley Fool UK.

Further reading

Edward Sheldon has positions in Uber Technologies. The Motley Fool UK has recommended Tesla and Uber Technologies. The views expressed on companies mentioned in this article are those of the author and may therefore differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2024