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Aurora Innovation (AUR) shares have edged slightly higher recently, following a modest uptick of about 2% in the last day and smaller gains over the past week. Investors seem to be weighing the company’s performance during the month, as Aurora continues its work in autonomous vehicle technology.

See our latest analysis for Aurora Innovation.

Zooming out, Aurora Innovation’s 1-year share price return is still down double digits, while its three-year total shareholder return remains notably positive. After a recent stretch of modest gains, momentum is still searching for its footing as investors gauge the company’s long-term roadmap and evolving risk profile.

If Aurora’s recent moves have you reflecting on shifts across the sector, now is the perfect time to explore innovation on a broader scale through the See the full list for free.

With shares trading well below analyst price targets and impressive long-term gains in the rearview, investors now face a critical question: Is Aurora a bargain poised for growth, or is the market already factoring in its future potential?

At a price-to-book ratio of 4.8x, Aurora Innovation trades below its peer average of 5.9x based on this valuation measure. This suggests the stock is relatively more attractively priced compared to similar companies. With the last close at $5.15, this indicates the market is discounting Aurora relative to its book value more than its immediate peer group.

The price-to-book ratio compares a company’s market value to its net asset value. This metric is particularly relevant for asset-light and high-growth sectors like software and autonomous vehicles. For Aurora, this ratio reflects what investors are willing to pay for the company’s equity compared to the book value recorded on its balance sheet.

This valuation suggests investors may be skeptical about Aurora’s path to profitability or are discounting near-term challenges, despite the sector’s broader appetite for growth. However, the company’s price-to-book still remains higher than the US Software industry average of 4x. This signals the market may still be assigning a premium for its technology or future prospects relative to the average US software company, though less so compared to its closest peers.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book of 4.8x (UNDERVALUED compared to peers)

However, continued net losses and uncertainty around the company’s path to profitability remain challenges that could weigh on future share performance.

Find out about the key risks to this Aurora Innovation narrative.

While the price-to-book ratio offers one angle on Aurora’s value, the SWS DCF model provides a different perspective. According to our DCF analysis, Aurora shares are currently trading about 37.8% below our estimate of their fair value. This suggests a considerable undervaluation if you believe the model’s assumptions.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Aurora Innovation for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

If you see the story differently or want to dig into the numbers yourself, you can craft your own take in just a few minutes with Do it your way.

A great starting point for your Aurora Innovation research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include AUR.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

By the time you’ve exited the plane, edged through passport control and endured the baggage claim wait, your only thought may be of home or a hotel bed. But passengers at Australia’s major airports have recently noticed some changes as they contemplate the final leg of their journey.

Since Friday, in a bid to deter illegal touts, a new taxi booking trial at Melbourne airport has allowed some passengers to pay a fixed fare upfront. And next month, Sydney airport will begin its own one-year trial of a $60 flat fare for the 13-km journey to the CBD.

The changes, supported by the taxi industry, are a sign of its struggle to remain competitive with the rideshare companies – especially Uber. They also come amid a crackdown on rogue taxi drivers and operators.

This month, the New South Wales government approved making a 12-month Uber PIN trial outside Sydney airport’s international terminal fully permanent. The trial let riders match with a first-available driver already waiting in the zone, rather than waiting for a pre-assigned driver. It follows Melbourne, which become the first Australian airport to introduce kerbside Uber pickups in 2021.

Some argue the Uber PIN kerbside pickup zones risk favouring the rideshare giant to the point of being anticompetitive.

Here’s what the battle between taxis and Uber means for your airport trip.

What changes are airport taxi drivers making?

Flat airport taxi fares already exist in cities such as New York and Paris. At Sydney, a $60 fare – or $80 for a larger Maxi-taxi – will be implemented for all trips to the CBD as part of a 12-month trial from 3 November.

A NSW government spokesperson said while “there is always a risk of non-compliance”, on-street inspectors will actively monitor the trial.

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The Melbourne trial is slightly different. Passengers can book a fixed – rather than flat – fare to their destination from one of three kiosks in the Qantas domestic terminal.

After entering an address to secure a quote and pay, they are issued with a receipt showing the guaranteed price. They are then directed to a bay to meet a driver from one of four taxi companies: Silver Service, Black and White, 13cabs and Silver Top.

Under the Uber pickup system, which operates at Sydney international and Melbourne’s T2 domestic and international terminals, passengers receive a PIN when booking a ride through the app. They then provide the PIN to a waiting driver in the designated pickup zone.

What’s at stake?

The battle is on for lucrative fares from the tens of millions of passengers moving annually through Sydney and Melbourne airports.

Data of journeys from Sydney airport’s international terminal shows the ground Uber has won since 2015. Taxis accounted for more than half of fares from the terminal in 2019, with Uber making up 35%. But five years later – even before the introduction of the trial – they had swapped, with Uber making up 50% of fares in 2024.

In the Uber PIN trial’s first year, that shot up even further. In the year to date Uber contributed 73% of pickups from the terminal, while taxis have dropped to 27%. In the 12 months of the trial, the rideshare company clocked more than 300,000 trips from the new pickup zone.

Across Melbourne airport – which has Uber PIN pickup zones outside terminals 2 and 4 – about 60% of passengers now use Uber for pickups and dropoffs, 20% use taxis, and the remainder use other services including the Skybus.

Hussein Dia, professor of future urban mobility at Swinburne University, views the taxi trials as an “useful experiment” but a “symbolic move” that is up against the ease of Uber’s app interface, ratings and complaints system.

“The taxi industry, in its older service model, has just lost ground. It’s not really in touch with what people want as well.”

Nick Abrahim, the chief executive of the NSW Taxi Council, said the “majority” of the industry welcomed the flat fare in NSW. The council lobbied for the change, initially asking for $75, although the state’s independent price regulator settled on $60.

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But Abrahim said Sydney’s soon-to-be-permanent Uber PIN trial, under which the company was granted an exemption to operate the rank usually reserved for taxis, did not “sit well at all”.

“This gives Uber an upper hand. It gives them another free kick.”

Asked if making the trial permanent created an anti-competitive environment, the NSW transport minister, John Graham, said it “addressed a specific problem at the airport – a lack of choice and convenience for those people who prefer rideshare”.

Sydney airport said bringing Uber kerbside had “made it easier and more convenient” for travellers to access both taxis and rideshare services.

Geoffrey Clifton, a senior lecturer in transport management at the University of Sydney, said flat and fixed fare trials were a “reasonable compromise” to respond to distrust in the taxi industry.

In NSW, fines for a first offence for taxi drivers are tripling to $3,000 after the prosecution of a driver who charged a $189 fare from Sydney airport to the CBD. This month, the Victorian government introduced a bill which includes a “two strikes and out” rule, banning drivers who repeatedly overcharge.

So how much will my trip cost?

The Melbourne fixed-fare kiosks use the same technology as the 13Cabs app, based on the meter amount for a trip between the airport and the CBD.

Guardian Australia checked taxi fares from Melbourne’s Qantas domestic terminal to Southern Cross station – where the Skybus also terminates – in the morning during peak hour and in the evening after peak hour, and was offered journeys of $78 and $79 respectively. The equivalent Uber fare was $57 in the morning, and $65 in the evening.

The $60 flat taxi fare at Sydney airport is exactly that: Under the trial, a taxi from any terminal will cost you $60 to any location in the CBD. Clifton said taxi drivers wary of the fixed fare may still stick around for suburban passengers.

“There’s still a lot of people traveling from the airport to other suburbs. It’s not just just the city centre.”

When Guardian Australia checked Uber fares from the international terminal to Central station, the app offered journeys of $45 in morning peak hour and $46 in the later evening.

But Abrahim said there may be times when taxi journeys to the northern end of the CBD, to areas such as the Rocks, could be cheaper under the flat fare, including during Uber surge pricing events (which the NSW government does not regulate).

When we checked Uber fares to the Rocks during morning peak hour, the app offered a fare of $55, but in the evening the price was $66 – meaning the flat taxi fare would offer a modest saving.