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UBER Soars 55% YTD: How Should Investors Play the Stock Now?
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Key Takeaways
UBER shares have jumped nearly 55% YTD, outpacing the Internet-Services industry and rival Lyft.
Gross bookings rose in the double-digits in both mobility and delivery, with Q3 growth expectation of 17-21%.
A new Flytrex drone partnership and a $20B buyback show UBER's growth drive despite valuation risks.
Despite tariff-related uncertainties, shares of Uber Technologies (UBER - Free Report) have gained 54.9% so far this year. As a result of this 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 - Free Report) .
YTD Price Comparison
Image Source: Zacks Investment Research
Given this impressive price performance, the question that arises is whether it is worth buying the stock at current prices. Let us dig deeper to find out.
Factors Working in Favor of UBER
Gross Bookings Growth: Uber continues to gain from robust growth in gross bookings, with both its mobility and delivery segments posting strong double-digit increases. This reflects sustained demand for the company’s services. In the June quarter, the mobility segment’s gross bookings climbed 18% year over year on a constant-currency basis to $23.7 billion, while the delivery segment’s gross bookings advanced 20% to $21.7 billion.
For the third quarter of 2025, Uber projects total gross bookings between $48.25 billion and $49.75 billion, representing year-over-year growth of 17-21% on a constant-currency basis. The forecast factors in a neutral to slightly positive foreign exchange effect. Our current estimate stands at $48.3 billion, indicating 17.9% growth from the third-quarter 2024 actuals.
Return to the Drone Deliveries Field: Last month, Uber entered a partnership with drone operator Flytrex. The partnership aims to launch drone delivery on the Uber Eats platform. The service is expected to begin with Uber Eats pilot markets in the United States by the end of 2025. Uber Eats is the online food ordering and delivery platform of Uber.
The partnership results in the combination of Flytrex’s proven autonomous drone delivery system and Uber’s global platform and logistics expertise for creating a fully integrated end-to-end experience for speed, safety and scale. For expediting the development and deployment of drone delivery technology, Uber is making its first investment in drone technology with Flytrex.
The association with Flytrex marks Uber’s return into the field of drone deliveries after 2019, when Uber Eats intended to test flying food to customers by drone in San Diego and made a few test deliveries in partnership with McDonald's (MCD - Free Report) . Uber Eats collaborated on the experiment with Uber Elevate, the company’s aviation division, at that time.
However, the testing in partnership with McDonald’s failed to launch commercially. With autonomous drones being the future of food delivery, Uber’s move to ink a deal with Flytrex is a prudent one.
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 is looking to strengthen its Uber Eats platform and has inked multiple deals recently on that front.
Last month, Uber announced a nationwide partnership with ALDI, America’s fastest-growing grocer. Following the deal, ALDI’s much sought-after selection of fresh and affordable products will be available on Uber Eats. With more than 2,500 ALDI stores joining the platform, customers can have groceries delivered directly to their doorstep either on demand or through scheduled orders with just a tap.
Strong Financials & Robust Share Buyback: Uber is well-positioned to weather short-term challenges, with $8.6 billion in cash and equivalents at the end of second-quarter 2025. 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, part of the $7-billion program, was completed in the first quarter of 2025.
Headwinds
Uber’s High Debt Load: We are also concerned about UBER’s high debt levels despite efforts to reduce them. The company’s times interest earned ratio was 14.9 at the end of second-quarter 2025, much lower than industrial levels. A lower times interest earned ratio often means that a company faces a greater risk of defaulting on its debt obligations. This implies serious financial problems.
Long-term Debt to Capitalization
Image Source: Zacks Investment Research
Unfavorable Valuation: Uber shares are expensive. The stock is overvalued compared with its industry. It is currently trading at a price-to-earnings multiple of 27.9, higher than the industry average of 23.21. 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.
UBER's P/E F12M vs. Industry & LYFT
Image Source: Zacks Investment Research
Unimpressive Earnings Estimate Revisions: The Zacks Consensus Estimate for the September-quarter and next-year earnings has been revised downward over the past 60 days. For the next quarter as well as for the current year, there has been no upward revision over the past 60 days.
Image Source: Zacks Investment Research
Here's How to Play UBER Stock Now
Uber is experiencing increasing demand across its ridesharing and delivery platforms. This rising popularity, along with ongoing growth initiatives and a firm commitment to cost efficiency, is contributing to the company’s strong business performance.
Given the multiple positives working in the company’s favor, existing investors are encouraged to hold onto their UBER shares to capitalize on its long-term fundamentals. However, potential investors may consider waiting for a more attractive entry point, given the stock’s premium valuation, modest earnings estimate revisions and debt levels above the industry average.
Image: Bigstock
UBER Soars 55% YTD: How Should Investors Play the Stock Now?
Key Takeaways
Despite tariff-related uncertainties, shares of Uber Technologies (UBER - Free Report) have gained 54.9% so far this year. As a result of this 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 - Free Report) .
YTD Price Comparison
Given this impressive price performance, the question that arises is whether it is worth buying the stock at current prices. Let us dig deeper to find out.
Factors Working in Favor of UBER
Gross Bookings Growth: Uber continues to gain from robust growth in gross bookings, with both its mobility and delivery segments posting strong double-digit increases. This reflects sustained demand for the company’s services. In the June quarter, the mobility segment’s gross bookings climbed 18% year over year on a constant-currency basis to $23.7 billion, while the delivery segment’s gross bookings advanced 20% to $21.7 billion.
For the third quarter of 2025, Uber projects total gross bookings between $48.25 billion and $49.75 billion, representing year-over-year growth of 17-21% on a constant-currency basis. The forecast factors in a neutral to slightly positive foreign exchange effect. Our current estimate stands at $48.3 billion, indicating 17.9% growth from the third-quarter 2024 actuals.
Return to the Drone Deliveries Field: Last month, Uber entered a partnership with drone operator Flytrex. The partnership aims to launch drone delivery on the Uber Eats platform. The service is expected to begin with Uber Eats pilot markets in the United States by the end of 2025. Uber Eats is the online food ordering and delivery platform of Uber.
The partnership results in the combination of Flytrex’s proven autonomous drone delivery system and Uber’s global platform and logistics expertise for creating a fully integrated end-to-end experience for speed, safety and scale. For expediting the development and deployment of drone delivery technology, Uber is making its first investment in drone technology with Flytrex.
The association with Flytrex marks Uber’s return into the field of drone deliveries after 2019, when Uber Eats intended to test flying food to customers by drone in San Diego and made a few test deliveries in partnership with McDonald's (MCD - Free Report) . Uber Eats collaborated on the experiment with Uber Elevate, the company’s aviation division, at that time.
However, the testing in partnership with McDonald’s failed to launch commercially. With autonomous drones being the future of food delivery, Uber’s move to ink a deal with Flytrex is a prudent one.
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 is looking to strengthen its Uber Eats platform and has inked multiple deals recently on that front.
Last month, Uber announced a nationwide partnership with ALDI, America’s fastest-growing grocer. Following the deal, ALDI’s much sought-after selection of fresh and affordable products will be available on Uber Eats. With more than 2,500 ALDI stores joining the platform, customers can have groceries delivered directly to their doorstep either on demand or through scheduled orders with just a tap.
Strong Financials & Robust Share Buyback: Uber is well-positioned to weather short-term challenges, with $8.6 billion in cash and equivalents at the end of second-quarter 2025. 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, part of the $7-billion program, was completed in the first quarter of 2025.
Headwinds
Uber’s High Debt Load: We are also concerned about UBER’s high debt levels despite efforts to reduce them. The company’s times interest earned ratio was 14.9 at the end of second-quarter 2025, much lower than industrial levels. A lower times interest earned ratio often means that a company faces a greater risk of defaulting on its debt obligations. This implies serious financial problems.
Long-term Debt to Capitalization
Unfavorable Valuation: Uber shares are expensive. The stock is overvalued compared with its industry. It is currently trading at a price-to-earnings multiple of 27.9, higher than the industry average of 23.21. 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.
UBER's P/E F12M vs. Industry & LYFT
Unimpressive Earnings Estimate Revisions: The Zacks Consensus Estimate for the September-quarter and next-year earnings has been revised downward over the past 60 days. For the next quarter as well as for the current year, there has been no upward revision over the past 60 days.
Here's How to Play UBER Stock Now
Uber is experiencing increasing demand across its ridesharing and delivery platforms. This rising popularity, along with ongoing growth initiatives and a firm commitment to cost efficiency, is contributing to the company’s strong business performance.
Given the multiple positives working in the company’s favor, existing investors are encouraged to hold onto their UBER shares to capitalize on its long-term fundamentals. However, potential investors may consider waiting for a more attractive entry point, given the stock’s premium valuation, modest earnings estimate revisions and debt levels above the industry average.
Uber currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.