So how much is Uber really worth?

Can Uber convince investors?
Can Uber convince investors?

A latest round of funding puts a $51 billion price tag on Uber, but a famed valuation professor said it is actually worth a lot less than that.

Aswath Damodaran, professor at NYU Stern School of Business and a valuation expert, values the ride-hailing company at $23.4 billion, less than half its current sticker.

"The big difference here is in the story we tell about Uber," he told CNBC's "Squawk on the Street" on Friday. "I think Uber's story is that they are going to be everything, everywhere. They're going to be a logistics company globally, and if you buy that story I think they are worth a lot of money."

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But, Damodaran said Uber's challenge is going to be showing how profitable it really is, especially with increasing competition.

"Investors are willing to wait a really long time and Uber may very well be able to convince investors, but I think the biggest challenge they face is, unlike a year ago when the competition was small and splintered, they are now playing against the big boys in their own game."

Lyft's announcement last month that it will merge with Chinese ride-hailing company Didi Kuaidi is a bad sign for Uber, he said.

Another reason why Uber may have problems with profitability are the regulatory hurdles the company faces around the world, Damodaran said.

"I think they are fighting 100 fights and that's why I said Uber's profits will be slow to come, because it's expensive fighting all these fights."

But, he added, the fact that there is so much pushback from regulators and cab drivers is a sign that the Uber model is working. "There is change coming to the car service business," he said.

— CNBC's Sara Eisen contributed to this report.