UBER: Expanding Driverless Rides Will Accelerate Market Leadership Over Rivals

Key Takeaways

• Expanding user base, product diversification, and deepening customer engagement through cross-platform integration and targeted promotions are driving strong revenue growth and retention.
  
• Strategic investments in autonomous vehicles, electrification, and high-margin ancillary services enhance long-term profitability and create sustainable competitive advantages.
  
• High investment in autonomous vehicles, intensifying competition, operational complexity, regulatory pressures, and lower-margin products threaten profitability and the scalability of Uber's core businesses.

Catalysts

Develops and operates proprietary technology applications in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific.

• Ongoing expansion of the user base in both developed and emerging markets-driven by urban growth, improved smartphone access, digital payments, and tailored product offerings (like Moto and premium/reserve options)-is increasing trips and gross bookings, supporting robust revenue growth.
  
• Cross-platform integration between Mobility, Delivery, and new verticals, combined with product initiatives like Uber One membership and targeted AI-powered promotions, is deepening user engagement and spend per customer, likely resulting in higher retention rates and improved consolidated net margins.
  
• Significant investments and accelerating partnerships in autonomous vehicles (AVs) and electrification (with Waymo, Lucid, Nuro, etc.) position Uber to benefit from secular industry shifts; successful AV commercialization could transform long-term cost structures and profitability, boosting future earnings potential.
  
• Progressive scaling of high-margin ancillary revenue streams such as advertising, data/tech platform externalization, and Uber One loyalty, are supporting margin expansion and enhancing long-term earning power.
  
• Uber's large-scale, multi-modal platform and ongoing operational efficiency improvements-underpinned by AI-driven route optimization and cost management-create a sustainable advantage versus monoline and regional competitors, supporting both revenue growth and stable/improving net margins.

Uber Technologies Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Uber Technologies's revenue will grow by 14.6% annually over the next 3 years.
• Analysts assume that profit margins will shrink from 26.7% today to 13.7% in 3 years time.
• Analysts expect earnings to reach $9.7 billion (and earnings per share of $4.72) by about September 2028, down from $12.6 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $13.7 billion in earnings, and the most bearish expecting $7.0 billion.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 27.8x on those 2028 earnings, up from 15.8x today. This future PE is greater than the current PE for the US Transportation industry at 24.6x.
• Analysts expect the number of shares outstanding to decline by 0.96% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.95%, as per the Simply Wall St company report.

Uber Technologies Future Earnings Per Share Growth

Risks

• Uber's heavy strategic and financial commitment to autonomous vehicle (AV) partnerships and direct asset ownership (e.g., vehicle purchases with OEMs) introduces significant capital intensity and profit risk, given that AV operations are currently unprofitable and commercialization/timelines remain uncertain-this may pressure free cash flow and net margins if AVs don't achieve scale or unit economics soon.
  
• Intensifying competition in both existing ride-hailing (from regional/local players and micro-mobility alternatives) and the upcoming AV market (from direct deployment by tech and auto OEMs like Tesla/Waymo) could erode Uber's market share and pricing power, putting long-term revenue growth and EBITDA at risk.
  
• Difficulty in balancing platform integration (the "super app" strategy) versus focused app experiences creates operational complexity and execution risk; poor cross-promotion or cannibalization between Mobility and Delivery could dilute consumer experience, slow active user growth, and undermine anticipated synergies and profit contributions from higher retention/membership.
  
• Persistent exposure to fluctuating regulatory and insurance environments-such as changing labor classifications, urban congestion pricing, or stricter environmental rules (e.g., EV mandates)-could increase Uber's compliance and insurance costs, squeezing net margins and limiting expansion of gross bookings.
  
• Although membership and lower-cost product expansion are increasing audience and trips, these segments (e.g., "wait & save", two-wheelers, subsidized surge pricing for Uber One users) typically generate lower profit per trip, risking further compression of average gross margin and requiring continued growth in high-premium segments to balance earnings and sustain net income growth.

Valuation

• The analysts have a consensus price target of $106.426 for Uber Technologies based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $150.0, and the most bearish reporting a price target of just $82.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $71.2 billion, earnings will come to $9.7 billion, and it would be trading on a PE ratio of 27.8x, assuming you use a discount rate of 8.0%.
• Given the current share price of $95.45, the analyst price target of $106.43 is 10.3% higher. Despite analysts expecting the underlying buisness to decline, they seem to believe it's more valuable than what the market thinks.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.