Uber Technologies UBER has had a remarkable run so far this year, with its shares hitting a new 52-week high of $98.86 yesterday, Sept. 15. Shares of UBER have gained in double digits so far this year despite the tariff-related uncertainty.
Courtesy of the upbeat performance, UBER’s shares have handily outperformed the Zacks Internet-Services industry on a year-to-date basis. It has also outpaced rival Lyft LYFT.
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With UBER stock moving north, investors may be tempted to add it to their portfolios. However, before making a move, it would be prudent to take a look at the reasons behind the surge, the company’s growth prospects and risks (if any) in investing.
Uber’s AV Ambitions Bode Well: Uber’s efforts to gain a stronghold in the evolving but highly lucrative autonomous ride-sharing market are highly impressive. Uber’s dominant market share in the ride-hailing industry gives it a unique advantage in the AV space. With its vast network of drivers and customers, Uber can quickly scale autonomous services once the technology matures. Its app is designed to integrate AVs from multiple partners, giving users a variety of options.
Uber, headquartered in San Francisco, CA, has multiple AV-related partnerships. By adopting this partnership-driven approach, Uber has avoided the massive R&D costs associated with developing autonomous systems independently. With the future of mobility being autonomous, UBER is one stock that seems to be hitting the right notes.
Strong Financials & Robust Share Buyback: Uber is well-positioned to weather short-term challenges, with $8.6 billion in cash and equivalents at the second-quarter 2025-end. The company’s current ratio (a measure of liquidity) is above 1. Uber reported a free cash flow of $2.5 billion in the second quarter of 2025, up 44% year over year, highlighting its financial bliss. In August, Uber announced a stock repurchase authorization of up to an additional $20 billion of common stock. With this bold initiative, UBER is not only enhancing shareholder value but also signaling confidence in its ongoing business strategy.
The latest shareholder-friendly announcement by Uber is in addition to the $7 billion authorization announced in 2024. We remind investors that the $7 billion share repurchase authorization was the first such program in the company’s history. The accelerated $1.5 billion stock buyback program, a part of the $7 billion program, was completed in the first quarter of 2025.
Commendable Expansion Efforts: Even though Uber’s primary business is ridesharing, it has diversified into food delivery and freight over time. Diversification is imperative for big companies to reduce risks, and UBER has excelled in this area. The company has engaged in numerous acquisitions, geographic and product diversifications, and innovations. Uber’s endeavors to expand into international markets are commendable and provide it with the benefits of geographical diversification. Prudent investments enable Uber to extend services and solidify its comprehensive offerings.
Healthy Gross Booking Growth: Uber is benefiting from upbeat gross bookings. The company’s gross bookings, for both the mobility and delivery segments, are increasing at healthy double-digit rates. This highlights the strong demand for its services. In the June quarter, gross bookings from the mobility segment increased 18% year over year on a constant-currency basis to $23.7 billion. Gross bookings from the delivery segment rose 20% year over year on a constant-currency basis to $21.7 billion.
For the third quarter of 2025, the company expects total gross bookings of $48.25 billion to $49.75 billion, indicating year-over-year growth of 17-21% on a constant-currency basis. The outlook assumes a neutral to modestly positive foreign exchange impact. Our estimate is currently pegged at $48.3 billion.
Uber’s elevated debt position is concerning. UBER had a total debt-to-total capital ratio of 0.3 as of June 30, 2025, higher than the industry’s reading of 0.06. Rival Lyft’s debt levels are even more elevated.
Moreover, Uber shares are expensive. The stock is overvalued compared to its industry. It is currently trading at a price-to-earnings multiple of 29.76, higher than the industry average of 23.73. Its Value Score of D suggests that the stock is anything but cheap and indicates a stretched valuation at this moment. Lyft shares are even more expensive.
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Uber’s earnings estimate revisions are not impressive, highlighting further concerns. The Zacks Consensus Estimate for current-quarter and next year earnings has been revised downward over the past 60 days. For the next quarter, there has been no upward revision over the past 60 days. The upward revision for current-year earnings has been marginal over the same time period.
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Uber is seeing rising demand across its ridesharing and delivery platforms. This growing popularity, combined with new growth initiatives and a strong focus on cost discipline, is helping drive solid business performance.
Uber’s inclusion in the coveted S&P 100 index on Sept. 22, before the market opens, is a further positive. UBER will replace Charter Communications CHTR in the S&P 100 index. Charter Communications will, however, remain in the S&P 500. The change ensures that the index is more representative of its market capitalization range. UBER’s market capitalization is currently $200 billion, way above Charter Communications’ $36 billion.
With Uber having a lot working in its favor, investors holding UBER shares should continue to do so to benefit from the solid long-term fundamentals. However, new investors can wait for a better entry point, considering the premium valuation, unimpressive earnings estimate revisions, and its debt levels that are higher than the industry. Uber currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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