Why It’s Not Too Late to Board the UBER Bandwagon

TipRanks

Thu, May 22, 2025, 10:00 AM 6 min read

Trading around its all-time highs, Uber Technologies’ (UBER) stock has enjoyed solid momentum, fueled by a booming business and valuations that still feel comfortably reasonable. My bullishness on Uber stems from its dominant global platform, backed by strong network effects that continue to drive consistent profitability, thanks to its scalable, asset-light model across mobility and delivery.

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Uber’s latest quarterly earnings figures, published earlier this month, reinforced that story. Add to that a fading perception of risk from Robotaxis and the tariff drama now behind us, and it’s easy to see why Uber’s recent rally feels well justified.

Looking ahead, even after the stock’s rebound, a valuation analysis based on market-expected growth and assumptions that align with Uber’s business model still suggests there’s a margin of safety to initiate a long position, though short-term upside might be more limited from here.

There’s really not much to fault in Uber’s latest results. In a quick recap of the company’s Q1 2025 earnings, Uber grew its customer base by 14%, reaching a record 170 million monthly active users globally. And that growth wasn’t just on paper—trips were up 18% year-over-year, and gross bookings rose another 14% (despite a mild quarterly deceleration). This proves that Uber continues to attract and retain users at a large scale. In fact, global retention rates hit all-time highs, which says a lot about Uber’s value proposition, built around convenience, accessibility, and affordability.

At this point, Uber’s value proposition has become one of its most significant assets. The company is increasingly seen as an essential service, especially in major cities, as consumers turn to Uber amid the rising global costs of car ownership.

That growing relevance is also showing up in the financials. For Q1 2025, Uber reported record profitability of $1.9 billion in adjusted EBITDA—a 35% increase from last year, highlighting how the company is efficiently scaling its rideshare business while tightening up operations.

One key reason investors were initially skeptical about Uber’s long-term potential was the rise of autonomous vehicles, particularly from automakers like Tesla (TSLA). The fear was that autonomous cars could replace or decelerate the need for services like Uber altogether.