Uber Technologies, Inc.

Thesis

Amidst a ludicrous bull market where most stocks trade at preposterous prices, there are few stocks that trade at fair valuations despite strong growth. We believe $UBER is one stock in this category. Despite strong and hostile expectations of AV (Autonomous Vehicles, or self-driving cars) based ride-hailing presence from renowned companies such as Waymo (Alphabet) and Tesla, we still believe Uber can continue its strong margins growth supported by increasing revenue stream and growing operating leverage.

With the release today (Nov 20, 2025) of September's US job report, which announced high unemployment rates, Uber is now below our calculated intrinsic value of $UBER at $87.52 (disclosed further in Valuation), with closing price of $83.37. We believe this is an excellent buying opportunity for retail investors, with an average price target of ~$108.09 among analyst consensus, translating potential upside of 29.65%. 

Here are some strengths covered in brief detail that we believe support Uber’s moat for the long term + benefit investor relations:

  • Strong, improving finances. Uber has consistently beat analyst expectations in prior years, with TTM operating income growth of 50% and TTM adjusted EBITDA growth of 36%, with credits to improving unit-economics from its scaling economy. 

  • Customer growth and reinforced brand reputation. Significant usage in Uber services, with nearly 50 billion gross bookings in Q3 alone, + an additional 21% & 20% YoY growth in gross bookings and revenues. This figure is not expected to cease anytime soon, with network effects strengthening Uber as the population's preferred ride-hailing service.

  • Management’s capital allocation. Uber’s asset-light model and high margins enables the company’s ability to generate high free cash flow, with an FCFmargin of 107%, generating more cash than actual earnings. Management proposes to spend up to 50% of their FCf on share buybacks to reward investors + offset dilution. 

  • Efficient unit-economics against competitors. Uber’s economy of scale is significantly benefitting itself against competitors. It’s operating margins of 8.3% is significantly higher than ride-hail competitor Lyft and food delivery competitor Doordash, who respectively has operating margins of 0.39% and 7.5%

 

Business Overview

Uber Technologies, Inc. is an innovator and global leader in the ride-hailing and food delivery industry. With headquarters in San Francisco, it currently operates in approximately 70 countries and 15,000 cities worldwide (10-K, 2024). The company provides ride-hailing, courier services, food delivery, and freight transport. Ridesharing is their core service with over 180 million monthly active users and 6 million active drivers and couriers. Additionally, Uber’s large scale has allowed them to have a strong data network in place for providing accurate ETAs, improving matching, and delivery.

 

Uber’s business can be broken up into mobility, delivery, and freight. Mobility (or ride-hailing) works with customers, providing ridesharing, micromobility, taxis, rentals and careshares. Delivery works to connect consumers with meals, grocery, alcohol, or convenience retail through Uber Eats, while retailers and grocery chains can use their courier network to deliver orders placed through their own service. This business-to-consumer (B2C) and business-to-business (B2B) create a cohesive ecosystem. Freight operates as a digital freight marketplace, helping connect shippers and trucking carriers.

 

Roadmap

Uber has stated their future plans of making all delivery trips zero-emission and promote sustainable packaging. They hope to achieve the goal by 2040. During July 2025, Uber announced a partnership with Lucid and Nuro to support deployment of AVs, beginning deployment in a major U.S city starting in 2026. Further partnership with NVIDIA’s AI architecture is planned to support autonomous vehicle development.

 

Competitive Advantage

Uber’s Moat

Uber is a leader in the industry for ride-hailing and food delivery. There exists a clear economic moat for the company, through its cost advantage of scale +  its edge in data and network effects.

 

Network & Brand Reputation

Uber’s strong network is one of its greatest strengths. It is seemingly obvious over time that Uber is becoming progressively prevalent in our everyday lives. From calling an “Uber” and ordering “UberEats”, the brand has replaced “taxi” and “food-delivery”, integrating itself into our daily vocabularies.

 

Judging the data presented in their Q3 2025 Earnings presentation, we can see a continuous growth in  Monthly Active Paying Customers (MAPCs), a 17% growth YoY and a steady average MAPCs growth of 15% in the previous 4 years. Furthermore, there is also  a 4% growth growth for monthly trips on a per MAPCs basis; this is contributed through the further incentives provided to existing customers to use the service more. The addition of users adds to the continuous loop of more drivers and ultimately, more users due to the shorter wait time from more availability.

 

(MAPC Growth vs. YoY Growth (%). Source: datawrapper)

 

We expect Uber’s moat of strong user-driver networks to endure at least before the full implementation and commercialization of autonomous vehicles . Assuming all operations continue without interference, then we will continue to possess great confidence in Uber’s network and brand advantage, in sure hopes of its continual in sustaining the company's financial growth in the coming years.

 

Data Advantage

As mentioned previously, every user experience in mobility, freight, or delivery, provides information to improve and further train the dataset. Its services span over 70 countries with 2.6 billion trips just in the previous quarter (Q2 2025) alone, with a total users amounting to 189 million monthly (Q3 2025). Data intelligence is not an issue for Uber. The use of Uber’s deep learning DeepETA post-processing model combined with an initial use of the routing engine gives far more accurate ETA predictions that work on a large scale due to its ability to handle large numbers of requests without slowing down. It is safe to say that Uber’s widespread services creates an entry barrier for new entrants from mimicry as it is very unlikely that they will be able to keep up with the technical & high usage based advantages of Uber’s datasets; this barrier will likely continue to crown Uber as the utmost reliable and satisfactory service provider.

 

Cost Advantage

Uber’s greatest competitors in food delivery and ride-hailing, respectively, are Lyft and Doordash. Comparing Uber’s competitors in both industries of food delivery and ride-hailing, Uber is a benefactor of price taking (i.e. Uber prices its services relative to the industry), setting equivalent prices while earning greater margins through its larger economies of scale. Due to their already large network of drivers, and Uber’s continuous additions to users and drivers, we see a decrease in idling, with more reliable ETAs, and better matching. Ultimately lowering costs below competitors. 

 

Similar to the leadership in his prior company, Expedia, CEO Dara Khosrowshahi applied the strategy of an asset-light business model to conserve capital. The costs and expenses associated with running any business have been minimized with the absence of physical assets, i.e. fixed assets such as PP&E and company owned cars. This is an advantage that separates itself from major competitors such as Tesla and Waymo, who currently require high capital expenditures to expand its AV operations, while accumulating significant debt burden. Their compensation for negative margins ultimately comes at a cost of comparably higher prices than Uber, leaving enough time and resources for Uber to complete its partnership with Waymo and acquire an AV fleet of their own. 



Uber’s moats in networking advantages, data advantages, and cost advantages under the mobility sector show a promising trajectory for future years. There continues to be consistent growth in the MAPCs as well as frequency of usage. Furthermore, the large-scale efficiencies of Uber’s operations create a high barrier of entry, making it very difficult for other companies to achieve the same level of profitability. The only possible failure modes are likely to arise from external factors rather than only competition. For example, future regulation of classifying drivers as employees will raise the cost-per-trip. As Uber’s main moat comes from its network of drivers, introducing AVs entirely removes the driver’s cost and creates a huge advantage; this would only be a huge win for Uber if they control a majority of the AV market, but with competitors like Waymo or Tesla, it can be seen as risky. 

 

Management & Capital Allocation

As mentioned, Uber’s asset-light business requires little Capex; extra cash flow from Uber’s operations are instead used to further advertise and improve consumer benefits witnessed in discounts + coupons in its platform Uber and UberEats. This asset-light model has significantly benefitted Uber, allowing the core business to generate MORE free cash flow against EBITDA. Despite its current scale, Uber’s strong revenue growth continues to strengthen its market power, narrowing feasible entry opportunities for competitors. 

 

Insider ownership based on Uber's annual proxy on March 3rd, reports 3.7% ownership of shares in its management team. Additionally, ~80% of outstanding shares are institutional, with big players such as Vanguard and Blackrock owning stakes of 8.01% & 6.66%, respectively. Many firms are upping their stakes in Uber, indicating high expectations for future performance. 

 

Uber has been adequately satisfying shareholders, positioning itself as an investor friendly company; with high liquidity + rapidly growing cash flows, management focuses heavily on share repurchases to offset dilution and reward shareholders. In Q2, management announced a $20 billion buyback plan for shareholders in addition to the remaining $3 billion pending for repurchases. Management expects 50% of future FCF to return to shareholders via buybacks in addition to reducing diluted shares. 

 

Finances and Operations

Growth

Uber’s long term efforts to expand its business model through hefty financial expenditures despite substantial net losses has finally paid off, achieving its first net operating profit in Q2 2023 and since becoming the largest player in the ride-hailing industry by market share. Uber provided their Q3 press release on Nov. 4th, continuing steady growth that is seemingly unwavering in both revenues and gross bookings.

Uber continues to keep investors hooked, with 21% YoY growth in gross bookings totaling to $49.7 billion in the quarter, followed by a similar figure of 20% YoY growth in revenues. Notably, gross bookings has drastically increased, attributed to a combination of recurring usage of Uber’s services in addition to heightened Monthly Active Paying Customers (MAPCs); this figure for MAPCs has seen growth of 17% YoY, with monthly trips per MAPC growing at 4% YoY as well. 




(Statistics of growth YoY. Source: datawrapper)

 


!It is highly unusual and simultaneously intriguing how Uber is able to sustain such growth despite a company of its size. As shown above, Uber has consistently grown its user base at a steady rate of 15% especially in the past two years, towards 189 million MAPC when this same figure was only at 142 million just two years ago.

Profitability Breakdown

On a trailing-twelve-month (TTM) basis through Q3 2025, Uber’s underlying revenue growth has kept up with investor expectations as supported by increased sales volume + improving unit economics. 

 

Profitability has increased meaningfully: TTM Adjusted EBITDA is $8.1 billion, up from $5.9 billion TTM through Q3 2024 (+36% YoY). Quarterly EBITDA hit record highs at $2.2 billion, up 33% YoY. Uber’s profitability is improving every quarter, with an adjusted EBITDA margin of 16.8%, growing continuously with the model evident below. This growth, as mentioned prior, is attributed to increased sales volumes and diminishing reliance on promotions to attract customers. 


(EBITDA % revenue trending upward each quarter. Source: datawrapper)


Over the same period, operating income has seen growth of 50%, from $3.4 billion (TTM Q3, 2024) to $5.1 billion (TTM Q3, 2025). The corresponding improvement in operating margin from 8% to 10% highlights greater operating leverage, with fixed costs spread across a larger revenue base.

 
Uber reports free cash flow of $2.2 billion of FCF in Q3 and $8.7 billion on a TTM basis, up 80% YoY. This equates to a FCF margin of 18% and a shocking FCF to EBITDA conversion of 107%, suggesting significant earnings power and behaving much like a FCF machine.

Net income over a TTM basis has increased by 280%, with net margin of ~33%. Do take a grain of salt with Uber’s net income, which is highly inflated by multiple one time transactions within the past year, such as Q3’s one time tax benefit which inflated its quarterly reported net income by $4.9 billion. Note that though impressive, net income does not appropriately represent Uber’s income from operations.

Uber has been actively paying back its debt of $12 billion ever since the company began turning a profit in 2023. Just two years ago in Q4 2023, Uber’s debt-to-equity ratio was at 92%, whereas today this amount is at just 42%; attributed to lower debt of $9.6 billion and heightened total shareholders equity. This decrease will further assist in lowering interest expenses on balance sheets and deleverage its debt profile.

Valuation 

Under the assumptions of our DCF, we conclude that the intrinsic value is $87.52 with an upside of 3.67%. The key assumptions made were: WACC was considered 9.9% with a terminal growth rate (TGR) of 3.2% to account for Uber’s continuous global expansion with high-margin revenue streams, allowing it to run slightly over long-run nominal GDP. In total, Uber has fully diluted shares outstanding of 2.124 billion.  

 

Analysis on Assumptions

We used a revenue-driven forecasting approach for all major items. Revenue growth was based on applying an annual decay rate of 12% to revenue growth. The EBITDA and EBIT was forecasted by separating their individual accounts and applying their historic respective average to future revenue. 

Own model

 

The tax accounts are projected by using Uber’s relationship between income tax expense and pre-tax income, resulting in a forward rate of 9.2%. 2023 values are taken to exclude outliers in performance.

 

Depreciation & amortization (D&A), capital expenditure (CapEx), and net working capital (NWC) were forecasted by applying their respective average historical ratios to future revenue.

 

Own model

 Cross-Checks

Uber’s main competitors in their mobility and delivery sectors are Lyft and DoorDash respectively. We will verify our IV through enterprise-multiple valuations. 

 The EV/EBITDA (forward estimates) ratio for Uber, DoorDash, and Lyft is 22.2x, 32x, 13.8x respectively, based on valuations gathered from marketscreener among other sources. Thus, we can assume that Uber is a base market, while DoorDash is bull and Lyft is a bear market. 

 By applying forward EV/EBITDA multiples for Uber's closest peers, and using the 2025E EBITDA from my forecast, the multiple-based valuation had a range of $45.83-$107.02 per share. This sits within the range of our intrinsic value of $87.52. Enterprise-multiple valuations are more strictly anchored to the current market pricing, ignoring long-run growth or margin expansion. Therefore, the results are optimistic but still realistic

Sensitivity Analysis

The assumptions that were used include a WACC of 9.9%, TGR of 3.2% and a base intrinsic value of $87.52. Based on the model, we see that the valuation is most sensitive to WACC and TGR. Our assumptions present the valuation range to be between $71—$110 per share, highlighting a clear uncertainty in long-term growth assumptions. Our base case of ~$88 sits between optimistic and pessimistic scenarios.

 

Own Model

 

Based on the DCF and multiple cross-check, our assumptions reveal that Uber is fairly valued. The stock is currently being traded below the intrinsic value, and still trades below the upside implied by the bull scenario ($110). The upside case is more likely as further explained in the report.

 

Growth Drivers & Catalysts

Uber’s strong economic moat provides growth drivers that support the business in its continuous growth. We will be separating Uber’s growth motive into future catalysts, structural drivers, company levers, and key performance indicators (KPIs).

 

With the recent signing of a mult-billion-dollar deal with Lucid and Nuro and plans to use NVIDIA’s AI architecture for a robotaxi, it's possible that AVs are a future catalyst for Uber’s growth. As stated by Uber, deployment is expected in a major U.S. city starting in 2026. Investors will be focused on Uber’s FY2025 earnings release scheduled for early Q1 2026 for updated targets and progress for AVs.

 

Uber’s structural component is a player in its long-term growth and expansion of the total addressable market (TAM). Uber leads the U.S ride-hailing market with a market share of ~74%, but under 30% for global markets outside of North America. Uber’s priority in growth is tied to expanding their market share outside of North America. This is proven by the 2025 Q3 earnings report, which shows a continuous growth in their MAPCs; more people are adopting the services provided by Uber, fueling their growth in other countries. Additionally, the eventual launch of AVs may use demand that was previously limited by a lack of drivers or pricing.

 

Furthermore, Uber has notable company levers, supply expansion, pricing, and distribution. Supply expansion refers to the ability to grow the number of drivers, couriers, and merchants. A larger driver base lowers wait times and increases ride satisfaction and trip frequency. This creates a feedback loop; more service satisfaction attracts more riders, and higher demand attracts more drivers. This network fuels Uber’s continuous growth in MAPCs and ride frequency. In terms of pricing levers, Uber has been able to optimize its pricing algorithms, raising fares during times of high demand and lowering fares during low demand. The addition of subscriptions (Uber One) and premium ride tiers (Comfort, Black, Priority Delivery) allow the company to monetize those that are willing to pay more, easily increasing revenue per user. Lastly, a distribution lever ensures Uber has more opportunities to acquire users and expand usage. This is clear through Uber’s app ecosystem, where rides and Eats users are directed toward other services by the app layout. This is further signified by the benefits shown from the Uber One subscription, encompassing both the riders and Eats users. 

 

Finally, Uber’s earnings report reveals clear KPIs in MAPCs, trip frequency, total trips, and Uber One subscriber growth. In the recent Q3 earnings report, MAPCs had a YoY growth percentage of 17, with a 5 year growth of ~15%. Monthly-Trips/MAPCs (frequency) continue to grow at a steady 2% YoY with total trips seeing a 22% growth YoY from the previous year, and an average growth rate of ~19%. Uber’s 2024 annual report states the Uber One member base has reached 30 million, with a ~60% growth YoY. Collectively, these KPIs signal a strong and durable demand trend that reinforce the company’s outlook for the future.

 

Risks 

It’s quite clear that Uber has many outstanding contributors for such an excellent company, through management’s exceptional transformation of the company. Despite these factors, the company itself is not free of risks. In this section we will break down these vulnerabilities into competitive, operational, financial, regulatory risks — and what to watch out for. 

 

Competitive Risks

Competitive pressure remains the greatest risk for Uber. In recent years, competition from Lyft and Doordash has dwindled but still remains prevalent. Competitors, especially Doordash, still dominate the food delivery space, and can influence pricing, incentives, & user acquisition costs (UAC).

Additional competitors that have recently came into the spotlight, i.e. Waymo & Tesla, poses larger unknowns, and threatens Uber unpredictably in ways that Uber needs to address in the foreseeable future. Here is why we believe AV does not (yet) propose a real threat:

Waymo and Tesla, with their upcoming AV focused ride-hailing business, require exponential capital expenditures relative to margins, to manufacture these income-generating assets. It is extremely costly to merely service these vehicles in a few major cities; the full implementation of AVs on a wide scale is financially infeasible over the short term. 

 

Additionally, AV competitors need to markup pricing in compensation for breaking-even on their vehicles, which on an individual basis cost anywhere between $150,000 to $200,000. This sequentially forces customers to pay a premium of 30-40% on Waymo services as an alternative to Uber rides, despite Uber’s wage expenses.

The circumstances for Waymo are still at a weak-standing; even in cities where Waymo is under full operation, Waymo’s market share accounts for just roughly 5% across all ride-hailing services, out competed by Uber and Lyft. Its expensive implementation cost leaves little space for Waymo to neither engage in price wars nor expand its brand reputation & efficiency beyond a municipal basis onto a global one, at least not for a decade or two. 

 

Uber’s continuous growth in users, drivers, and datasets for their reasoning models create an advantage that is difficult to match by competitors without extensive capital expenditures. Lyft simply lacks the operational efficiency and gross margins in ride-hailing, and Waymo still has many years ahead before it will genuinely threaten Uber’s gross margins. Even if AV ultimately prevails against human drivers, Uber will simply build their own fleet (not to mention their pre-existing partnership with Waymo in 2027 for 100,000 vehicles) to fight against other brand names. These clear strengths make it difficult to undermine Uber’s lead positioning, although unpredictability in competitive dynamics should still be monitored for one’s own discretion

 

Operational Risks

Uber’s day-to-day operations run mainly through the app, availability of drivers, and low operating expenses. Any software failure or outages, like the Amazon Web service outage, can halt Uber’s entire operations and lower brand loyalty. 

 

Drivers protesting against Uber’s “unfair” wages, that is, to boycott against working for Uber, can pose a very real threat for its operations. One likely scenario can lead to a shortage of drivers, consequentially leading to longer wait times and surges in pricing, causing less customer satisfaction and a decline in riders, simultaneously creating less of an incentive to work as a driver. 

 

Regulatory Risks

Government rules can change the operating costs or even restrict market access, and these rules are not uniform worldwide and can vary across countries. In the U.S., workers are currently classified as independent contractors, but future requirements in classification—like minimum earning standards—can change Uber’s cost structure, like increasing labour costs. This includes minimum wage or earning requirements for workers. Aside from classifications, local jurisdictions may impose bans or permit limitations. Additionally, with the rolling out of AVs in 2026, there continues to be possible approval delays, leaving investors worried about the success of Uber’s AVs. 

 

Peer Comparison

Comp Set Definition

Uber’s publicly traded competitors can be identified for their different operating sectors; Lyft for U.S. mobility, and DoorDash for U.S. delivery. Lyft will be considered a competitor as it operates a transportational platform, specifically ride-hailing. Similar to Uber, it offers on-demand mobility, where users are able to book different tier drivers. DoorDash will be considered a competitor as it operates with the main service of restaurant food delivery, connecting consumers with nearby restaurants. Furthermore, similar to Uber, DoorDash provides grocery, convenience store, and retail delivery. Other similar companies like Amazon and Walmart offer delivery services, but differences in their logistics models make comparisons to Uber impractical.

 

Operational Comparison

Growth: Mobility Sector

Uber and Lyft’s operational growth will be measured using the gross bookings growth, trip/order growth, and user growth. All values will be gathered from both companies' Q3 2025. Uber has managed to continue its growth in all statistics; +17% YoY growth in MAPCs, 22% growth in trips YoY, and 19% growth in gross bookings (mobility). Lyft has shown similar signs of growth: 18% growth in active riders YoY, 15% growth in trips YoY, 16% growth in Gross Bookings YoY. Uber clearly has a stronger growth in both trips and users.

 

(Operational Comparison in the Mobility Sector. Source: datawrapper)

 

Delivery Sector 

Similarly, a comparison between Uber and DoorDash will be measured by Gross Booking (Uber) vs Gross Order Volume (DoorDash), and revenue growth. Uber stated a 24% growth YoY under Gross Bookings and a 27% growth under revenue. DoorDash stated similar values with a 25% increase YoY under gross order volume (GOV) and a 27% increase YoY under revenue. The growth between DoorDash and Uber is competitive with DoorDash being slightly stronger mainly in the U.S, as opposed to Uber’s broad global footprint.

 

 

(Operational Comparison in the Delivery Sector. Source: datawrapper)



Margins: Mobility Sector

Under Uber’s third quarter, 2025 10-Q, insurance expense has increased with a total of 3,512 million rides. Meanwhile, in Lyft’s third quarter 10-Q, there was a $65.9 million increase in insurance costs with a total of 248.8 million rides. In comparison amidst the two companies, the insurance cost per ride ratio for Uber and Lyft, respectively, is ~$0. 04 and ~$0. 26. To confirm Uber’s trend of growing margins, we can visit its previous quarterly filing (Q2 2025). Once again, Uber’s cost of insurance per ride ratio remains below Lyft’s at ~$0. 09 from ~$0. 46. For this reason among others, Uber has higher margins and is able to offer services at a discounted price   

 

Uber’s Q3 earnings presentation splits the adjusted EBITDA between different segments. We can view the one specific to mobility sectors. The adjusted EBITDA margin for Q3 2025 is ~27%. Similarly, Lyft’s margin is ~8.2%. The greater margin directly refers to a higher operating efficiency where more operating profit is generated for every dollar of revenue.

 

Delivery Sector

DoorDash is Uber’s main competitor in the delivery sector, where we will shortly see that there is a far narrower moat as opposed to the mobility sector. Once again, we will take the adjusted EBITDA margins for the mobility sector in the Q3 2025 earnings report. We see that Uber has a margin of ~21% while DoorDash has a margin of ~22%. In this case, Uber actually produces less operating profit for a dollar of revenue as opposed to DoorDash. We can conclude that any moat that exists is narrow and driven by scale efficiencies and cross-platform utilization of drivers rather than anything to do with operating efficiency.

 

Valuation Comparison

Forward multiples use 2025E.

(Valuation for forward multiples. Source: MarketScreener)

We see Uber trades at a justified premium to Lyft on forward EV/EBITDA, reflecting stronger margins and greater scale in mobility. Uber also trades above Lyft on forward EV/REVENUE, which is consistent with higher platform engagement and a more diversified business model.

 

However, comparing both forward EV/EBITDA and forward EV/REVENUE to DoorDash, we see that DoorDash is the one trading at a premium. DoorDash’s entire business model is delivery which leads to faster delivery growth in the U.S. and higher revenue-growth expectations. On the other hand, Uber operates in multiple sectors and is viewed as balanced, typically resulting in a lower growth premium.

 

Overall, Uber’s valuation sits between Lyft and DoorDash; the market views it as more profitable and stable than Lyft, but with a lower growth trajectory than DoorDash’s more focused, delivery-based model.

 

Conclusion

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