Uber Applied sciences (UBER -2.91%) has navigated the current inventory market volatility effectively, delivering a strong 23% year-to-date acquire for shareholders, whereas the S&P 500 index is down about 3.5% in 2025 to this point.
The ride-sharing big is capitalizing on robust demand throughout its platform, which has led to accelerating profitability. As the corporate targets new progress alternatives, a compelling case emerges that Uber’s outlook is stronger than ever.
Listed here are 4 causes I consider Uber Applied sciences inventory could make a wonderful addition to your portfolio proper now.
1. Uber is reporting robust platform demand
For greater than a decade, Uber has redefined private mobility, turning into a cultural shorthand for handy, on-demand transportation. The corporate’s progress trajectory has been outstanding, with its month-to-month energetic platform customers (MAPCs) now exceeding 170 million — greater than double the 80 million it reported in 2018. In 2024, the corporate facilitated 11.3 billion journeys worldwide, which generated $44 billion in internet income, up 18% yr over yr.
It isn’t simply its ride-sharing service fueling this momentum. Uber has efficiently launched a number of new transportation choices in recent times whereas leveraging its expertise ecosystem into providers like meals supply and freight options. Not solely are extra customers using an Uber service for the primary time, however they’re additionally more and more energetic, taking journeys or putting supply orders extra ceaselessly.
This ongoing diversification as Uber continues to enter new markets additional strengthens the corporate’s fundamentals as a high-quality business chief. But, Uber believes it’s simply getting began, noting that its shopper person base nonetheless represents lower than 5% of the whole addressable grownup inhabitants within the main international locations it serves.
Picture supply: Getty Pictures.
2. Uber is a cash-flow juggernaut
Maybe much more spectacular than Uber’s progress is its improved monetary place, the place earnings and free money circulate have crossed an inflection level. In 2024, earnings per share (EPS) of $4.56 soared in comparison with $0.87 in 2023, whereas the $6.9 billion in free money circulate was up 105%.
The expectation is for additional worthwhile progress with an upside for working margins. Uber’s administration has projected optimism towards its outlook, via its $7 billion share repurchasing authorization introduced final yr. Uber’s capacity to return money to shareholders provides to its enchantment as an funding.
3. Uber is positioned to guide with autonomous automobiles
Uber has confronted questions on the way it will handle the rise of autonomous automobiles (AVs), which current each a danger to its driver-based mannequin in addition to a large alternative. Administration acknowledges that mass-scale AV commercialization is years away, with value, security, and regulatory challenges making certain human drivers stay important to city mobility for the foreseeable future.
Nonetheless, Uber’s expertise and international infrastructure — overlaying buyer help, funds, and fleet administration — place it uniquely to help AV operators. Already partnering with leaders like Waymo (an Alphabet subsidiary) and China-based WeRide, Uber integrates autonomous rides into its community in choose areas, leveraging these collaborations to faucet right into a projected $1 trillion market over the subsequent decade.
4. Uber has a compelling valuation
Shares of Uber are buying and selling at 23 instances its consensus 2025 EPS estimate, a ahead price-to-earnings (P/E) ratio that I view as engaging for a consumer-focused tech titan delivering double-digit share progress. Whereas that earnings a number of instructions a big premium over its smaller ride-share rival Lyft (which trades at a ahead P/E of 12), Uber’s stronger model recognition, bigger scale, and extra diversified, future-proof choices justify its premium.
A greater comparability may be with disruptors like DoorDash, Airbnb, and even Amazon, which lead their classes within the platform financial system and commerce at ahead P/Es above 30. By this measure, Uber inventory presents a great mixture of progress and worth.
Information by YCharts.
Last ideas
I am bullish on Uber and predict its shares will proceed climbing. I totally count on the inventory value to regain its October 2024 all-time excessive value of $87 by this time subsequent yr (it is presently priced round $74). The corporate’s mixture of robust progress and recurring profitability positions it effectively to reward shareholders over the long term. Buyers assured in Uber’s potential have loads of causes to purchase the inventory for a diversified portfolio.
Suzanne Frey, an government at Alphabet, is a member of The Motley Idiot’s board of administrators. John Mackey, former CEO of Complete Meals Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of administrators. Dan Victor has no place in any of the shares talked about. The Motley Idiot has positions in and recommends Airbnb, Alphabet, Amazon, DoorDash, and Uber Applied sciences. The Motley Idiot has a disclosure coverage.
