Why It’s Not Too Late to Board the UBER Bandwagon

Trading around its all-time highs, Uber Technologies’ (UBER) stock has enjoyed solid momentum, fueled by a booming business and valuations that still feel comfortably reasonable. My bullishness on Uber stems from its dominant global platform, backed by strong network effects that continue to drive consistent profitability, thanks to its scalable, asset-light model across mobility and delivery.

Uber’s latest quarterly earnings figures, published earlier this month, reinforced that story. Add to that a fading perception of risk from Robotaxis and the tariff drama now behind us, and it’s easy to see why Uber’s recent rally feels well justified.

Looking ahead, even after the stock’s rebound, a valuation analysis based on market-expected growth and assumptions that align with Uber’s business model still suggests there’s a margin of safety to initiate a long position, though short-term upside might be more limited from here.

More Riders, More Profits

There’s really not much to fault in Uber’s latest results. In a quick recap of the company’s Q1 2025 earnings, Uber grew its customer base by 14%, reaching a record 170 million monthly active users globally. And that growth wasn’t just on paper—trips were up 18% year-over-year, and gross bookings rose another 14% (despite a mild quarterly deceleration). This proves that Uber continues to attract and retain users at a large scale. In fact, global retention rates hit all-time highs, which says a lot about Uber’s value proposition, built around convenience, accessibility, and affordability.

At this point, Uber’s value proposition has become one of its most significant assets. The company is increasingly seen as an essential service, especially in major cities, as consumers turn to Uber amid the rising global costs of car ownership.

That growing relevance is also showing up in the financials. For Q1 2025, Uber reported record profitability of $1.9 billion in adjusted EBITDA—a 35% increase from last year, highlighting how the company is efficiently scaling its rideshare business while tightening up operations.

From Risk to Ride-Along with Autonomy

One key reason investors were initially skeptical about Uber’s long-term potential was the rise of autonomous vehicles, particularly from automakers like Tesla (TSLA). The fear was that autonomous cars could replace or decelerate the need for services like Uber altogether.

In fact, over the past year, Uber’s stock has often moved in the opposite direction of Tesla’s, particularly when Tesla made announcements related to its Robotaxi project. Elon Musk outlined plans to operate a fleet of self-driving cars while also selling them to individuals interested in running their own Robotaxi businesses.

However, it’s clear that Uber hasn’t been sitting idly by. Instead, the company is actively embracing and leveraging new technologies, particularly in the realm of autonomous vehicles. What some investors viewed as a threat, Uber has become an opportunity.

The company has already started testing autonomous vehicles through a partnership with Waymo in Austin, Texas. The initial deployment of 100 cars has been highly successful, and Uber’s management is now expanding this partnership to include several hundred more. This not only shows that Uber is reinventing itself to compete in the future of ridesharing, but it’s also going the extra mile with autonomous technology.

According to Uber’s management, the company can offer the lowest operating cost for autonomous vehicle partners. This is because Uber is ahead in key areas, such as go-to-market capabilities, which are critical for commercializing autonomous vehicles at scale.

As a result, with the risk around autonomous vehicles decreasing and Uber continuing to deliver solid user growth and strong financials, it’s easy to see why the company’s stock has rebounded so strongly, especially since April.

The Road Ahead for Uber’s Valuation

Looking ahead, Uber’s second-quarter outlook shows strong expectations for continued growth. The company is projecting an 18% annual increase in gross bookings at the midpoint and a 32% growth in Adjusted EBITDA. However, is Uber fairly valued based on the market’s consensus on growth? A reverse discounted cash flow analysis suggests that it is.

While short-term expectations are solid, the long-term outlook is also promising. Analysts are projecting a compound annual revenue growth rate (CAGR) of 12.5% over the next five years. It’s also reasonable to assume that, as Uber’s business scales and profitability improves, operating income will grow at a five-year CAGR of 32%, in line with the company’s recent bottom-line guidance.

Considering Uber’s asset-light business model, CapEx should be under 3% of revenues, with Depreciation & Amortization accounting for roughly 70% of CapEx. I’ll also conservatively assume no changes in working capital, discount cash flows at a rate of 8.4%, and apply a 3% perpetuity growth rate for the business. This would give Uber’s business an equity value of $222 billion, translating to a share price of ~$106.

Of course, this reverse DCF analysis is only as reliable as the assumptions behind it. However, based on Uber’s past performance and industry trends, these assumptions seem reasonable, not overly aggressive. Given Uber’s ability to consistently beat bottom-line estimates, these assumptions might even be too conservative, offering a bit of a margin of safety for those considering going long.

What is the Forecast for Uber Technologies in 2025?

Uber has garnered plenty of optimism from Wall Street analysts. Out of 31 ratings given in the past three months, 27 are bullish, and the remaining 4 are neutral. However, this doesn’t suggest a massive price jump. Uber’s average stock target is $97.92, implying a conservative upside potential of ~6.5% over the next twelve months.

See more UBER analyst ratings

UBER Trades at All-Time Highs With Room to Grow

Uber continues demonstrating its ability to scale efficiently each quarter, even amid a rapidly evolving mobility landscape. This performance is primarily driven by its compelling value proposition, enabling the company to adapt to technological advancements and navigate competitive challenges.

Although Uber’s stock is currently trading near all-time highs, its valuation remains appealing, presenting a strong case for long-term investors. That said, short-term volatility may persist, particularly if margin pressures emerge as growth continues. Nevertheless, I view the stock as an attractive opportunity while it remains below the $100 mark, providing a reasonable margin of safety.