Is Uber a Bargain After 32% Surge Despite Recent Dip and Expansion News?

• Curious if Uber Technologies is a steal or overpriced at current levels? You are not alone, and today we will break down what really matters in valuing this stock.
• The stock has surged 32.0% year-to-date even after a recent dip, with a decline of 9.2% over the last week and 10.4% for the month. This shows both strong growth and a dose of volatility.
• News in recent weeks has highlighted Uber's expansion into new markets, regulatory updates in major cities, and intensified competition in ride-hailing and delivery. These headlines have fueled optimism around growth but also raised questions about long-term profitability and risk.
• For valuation fans: Uber earns a perfect 6/6 on our value score, meaning it screens as undervalued in all of our six checks, which is a rare feat worth a closer look. We will dig into how each approach values the stock and reveal a smarter way of understanding valuation by the end of this article.

Uber Technologies delivered 19.7% returns over the last year. See how this stacks up to the rest of the Transportation industry.

Approach 1: Uber Technologies Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a method that estimates a company's value by projecting its future cash flows and then discounting them back to today's dollars. This approach provides an intrinsic value estimate based on Uber Technologies' long-term ability to generate free cash flow.

For Uber Technologies, analysts calculate a current Free Cash Flow (FCF) of approximately $8.7 billion. This figure reflects the company's strong capacity to generate cash, even as it continues to expand. Looking ahead, analysts provide cash flow forecasts out to five years. From year six onwards, projections are extrapolated based on anticipated growth trends. By 2029, Uber's projected FCF is expected to reach $16.5 billion.

Taking each annual FCF estimate and discounting it to present value, the DCF model calculates Uber's intrinsic share value at $168.67. This is about 50.6% higher than the current share price, which suggests Uber may be undervalued according to this model.

If these forward-looking cash flows materialize, investors could be looking at a discounted opportunity, at least from a DCF perspective.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Uber Technologies is undervalued by 50.6%. Track this in your watchlist or portfolio, or discover 924 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Uber Technologies.

Approach 2: Uber Technologies Price vs Earnings (PE)

The Price-to-Earnings (PE) ratio is widely used to evaluate profitable companies like Uber Technologies, as it compares a company’s share price to its earnings per share. This ratio is particularly meaningful for businesses that have transitioned to consistent profitability, enabling investors to relate valuations directly to the company’s ongoing earnings power.

It is important to remember that growth expectations and risk both play significant roles in what a “normal” or fair PE ratio should look like. Higher growth prospects typically justify a higher multiple, while increased risks or weaker profitability usually demand a lower one. Benchmarking a company’s PE against peers and the wider industry can help, but it is not always the whole picture.

Uber currently trades at a PE ratio of 10.41x, much lower than the Transportation industry average of 24.97x, and even further below the peer average of 64.85x. This might initially signal undervaluation, but it is crucial to weigh factors beyond surface-level multiples.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio (13.49x for Uber) is calculated using proprietary methods that weigh not just growth and risk, but also factors like profit margins, size, and industry context. This makes it a more meaningful benchmark than simple comparisons with industry or peers, as it reflects Uber’s specific fundamentals.

Comparing Uber’s actual PE of 10.41x with its Fair Ratio of 13.49x, the stock appears undervalued based on this measure. Investors may be getting more earnings relative to price than Uber’s fundamentals would suggest is typical in the market.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Uber Technologies Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your story or perspective about where a company is heading, which you can easily plug into a financial forecast. This approach ties together your assumptions about future revenue, profit margins, and risks into a fair value.

Unlike static metrics, Narratives allow you to define what you believe about Uber Technologies, see how your beliefs affect the company’s fair value, and compare that directly to the current market price. On Simply Wall St’s Community page, you can access and contribute Narratives, making it simple to anchor your investment decisions to your own expectations or to explore the logic behind millions of other investors' forecasts.

Narratives are updated automatically as new earnings or pivotal news emerges, so your fair value always reflects the latest data and sentiment. For example, some investors project Uber’s fair value as low as $75 per share, citing slowing margin growth, while others see upside to $150 by forecasting lasting benefits from platform engagement, new technologies, and ongoing expansion. Narratives help you quickly understand and compare these perspectives, empowering you to decide for yourself when Uber Technologies is a buy or a sell.

For Uber Technologies, we will make it really easy for you with previews of two leading Uber Technologies Narratives:

🐂 Uber Technologies Bull Case

Fair Value: $110.55

Current price is undervalued by 24.6%

Forecasted Revenue Growth: 14.5%

• Analysts expect expanding user base, cross-platform memberships, and investment in high-margin services to support sustained revenue growth and improving margins.
• Strategic focus on autonomous vehicles, electrification, and ancillary revenue streams is expected to drive long-term profitability and create durable competitive advantages.
• Risks include heavy investments in AVs, regulatory pressures, operational complexity from super-app integration, and thinner margins from some lower-priced offerings, but consensus sees upside from network scale and platform effects.

🐻 Uber Technologies Bear Case

Fair Value: $75.00

Current price is overvalued by 11.1%

Forecasted Revenue Growth: 4.2%

• Uber has reached profitability and strong free cash flow, but growth is expected to slow sharply from here, with limited upside from autonomous vehicles over the coming years.
• With a market cap of $192B versus a fair value estimate of $90 to 135B, Uber is viewed as significantly overvalued at current prices, with reasonable value only in the $65 to 75 per share range.
• Despite robust past performance, concerns about margin sustainability, stabilization in core growth, and a relatively high PE keep the bear case cautious on new upside.

Do you think there's more to the story for Uber Technologies? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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