Should Investors Bet on Uber Stock Post Q2 Earnings Beat?

On Aug. 6, San Francisco, CA-based Uber Technologies UBER released rosy second-quarter 2025 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate. 

The question that naturally arises after the upbeat results is whether investors should rush and buy the stock of the company, which provides ride-hailing, food delivery and freight (leasing vehicles to third parties) services through its Mobility, Delivery and Freight segments, respectively, now. Let us delve deeper to answer the question.

Highlights of UBER’s Q2 Earnings

Uber’s second-quarter 2025 earnings per share of 63 cents outpaced the Zacks Consensus Estimate by a penny and improved 34% year over year. Total revenues of $12.65 billion outpaced the Zacks Consensus Estimate of $12.45 billion. The top line jumped 18% year over year on a reported and a constant-currency basis.

With economic activities normalized in the post-pandemic scenario, people are traveling to work and other places as before. As a result, UBER’s Mobility business has been seeing buoyant demand, with segmental revenues increasing 18% in the June quarter on a constant-currency basis.

With customer traffic picking up, gross bookings from the unit were highly impressive, aiding the second-quarter results. Gross bookings from the Mobility segment in the June quarter increased 18% year over year on a constant-currency basis to $23.7 billion.

Uber’s Delivery business also performed well in the quarter, with segmental revenues growing 23% year over year on a constant-currency basis. Gross bookings from the Delivery segment in the June quarter rose 20% year over year on a constant-currency basis to $21.7 billion.

Uber saw a 15% increase in its monthly active platform consumers to 180 million users in the second quarter. The platform recorded 3.3 billion trips, marking an 18% year-over-year rise, driven by both ride-hailing and delivery services. The company reported a free cash flow of $2.48 billion in the quarter, highlighting its financial bliss.

In several international regions, Uber Eats has overtaken ride-hailing in popularity. The company is focused on increasing cross-platform usage, encouraging customers to use both ride and delivery services to boost overall engagement and revenues.

The earnings beat by Uber in the June quarter enabled it to maintain its excellent earnings surprise record. Uber has outpaced the Zacks Consensus Estimate in the past four quarters, the average beat being nearly 200%.

Uber Technologies Price & EPS Surprise

Uber Technologies price-eps-surprise | Uber Technologies Quote

Uber’s Q3 Guidance Strong

For the third quarter of 2025, the company expects gross bookings of $48.25 billion to $49.75 billion, indicating year-over-year growth of 17-21% on a constant-currency basis. The outlook assumes a neutral to modestly positive foreign exchange impact.

The adjusted EBITDA is estimated to be $2.19-$2.29 billion, suggesting year-over-year growth of 30-36%.

UBER’s Price Performance Is Impressive

Uber has navigated the recent tariff-induced stock market volatility well, registering a 47.9% year-to-date gain, while the Zacks Internet-Services industry has moved up 5.9%. Uber’s main competitor, Lyft LYFT, has risen 8.5% in the same timeframe. Another industry player, DoorDash DASH, has performed better than Lyft and Uber year to date, soaring 53.9%. 

YTD Price Performance Comparison

Uber Shares Overvalued

From a valuation perspective, Uber is relatively expensive. Going by its price/earnings ratio, the company is trading at a forward earnings multiple of 27.3, above the industry’s 19.8. The company has a Value Score of C. Meanwhile, Lyft looks too cheap at a forward earnings multiple of 11.25, whereas DoorDash’s P/E sits at 86.08. Lyft and DoorDash have a Value Score of C and F, respectively.

UBER’s P/E F12M Vs. Industry, LYFT & DASH

How to Play Uber Post-Q2 Earnings?

Agreed that Uber’s valuation is anything but tempting. The company’s high debt levels and concerns pertaining to currency represent further headwinds. However, not all is gloom and doom for this dominant ride-sharing company.

The company’s diversification efforts and shareholder-friendly approach are praiseworthy. Uber’s large size (market capitalization of $186.57 billion) positions it well to overcome turbulent times, such as the current one. Diversification is imperative for big companies to reduce risks, and Uber has excelled in this area.

The company has engaged in numerous acquisitions, geographic and product diversifications and innovations. Uber’s endeavors to expand into international markets are commendable and provide it with the benefits of geographical diversification. 

Prudent investments enable Uber to extend its services and solidify its comprehensive offerings. Moreover, Uber aims to gain a stronghold in the highly promising robotaxi market through strategic partnerships. Uber now partners with 20 companies in the autonomous vehicle, delivery and freight space. By adopting this approach, the company has avoided the massive R&D costs associated with developing autonomous systems independently.

Uber’s scale, targeted market expansions and diversification strategies position it well for long-term growth. Given its solid long-term potential, retaining this Zacks Rank #3 (Hold) stock appears prudent. Meanwhile, new investors may consider waiting for a more attractive entry point.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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