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Uber, valued at roughly $17 billion by its latest round of funding, is actually worth closer to $6 billion, valuation expert Aswath Damodaran told CNBC on Monday.
The company's popular apps that match riders and drivers helped Uber garner an additional $1.2 billion in funding from investors earlier this month.
But the high-flying number makes a series of overly rosy scenarios, said Damodaran, the New York University finance professor widely known as the "dean of valuation."
"I don't think the Street says it. I think the people investing in the last round in Uber think it's worth $17 billion, but remember that the people investing in earlier rounds are probably sitting back and saying, 'Thank God we were not in the last round.' So, if you're Google, you're saying, 'I'm glad I got in at $3½ billion.' So, I think it's a very narrow pricing that's coming from a couple of big players who got in the last round," he said on CNBC's "Halftime Report."
Damodaran called it a good tale.
"I think it's a company that's driven almost entirely by narrative right now," he said. "It's a story that's waiting for the numbers to come in. And I think the story sounds really good, but I think if you put the numbers down, it's very difficult to get up to $17 billion."
In arriving at a valuation of $5.895 billion, Damodaran estimated in a blog post the potential market as $100 billion, giving Uber a 10 percent market share and keeping its share of gross receipts at 20 percent.
"I'd say even if you put the most optimistic numbers on the narrative, you get up to about $10 billion, maybe $12 billion," he added. "But $17 billion is pushing it."
Damodaran also alluded to regulatory risk and insurance questions that still face the company.
"In a sense, what Uber does in most cities is already illegal. So, you almost have to have the assumption that at some point in time the regulations are going to change to allow them to operate big time," he said. "Because if they don't change, Uber's going to have to spend a lot of money fighting these regulations in city after city to get its business going."
—By CNBC's Bruno J. Navarro