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On Nov. 4, San Francisco, CA-based Uber Technologies UBER released rosy third-quarter 2025 results, wherein both earnings and revenues surpassed the Zacks Consensus Estimate.
The question that naturally arises after the impressive results is whether investors should rush and buy shares 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.
Uber’s third-quarter 2025 earnings per share of $3.11 outpaced the Zacks Consensus Estimate of 67 cents and improved in excess of 100% year over year. Total revenues of $13.46 billion outpaced the Zacks Consensus Estimate of $13.26 billion. The top line jumped 20.4% year over year on a reported 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 20% year over year on a reported basis and 18% on a constant currency basis to $7.68 billion.
With customer traffic picking up, gross bookings from the unit were highly impressive, aiding the third-quarter results. Gross bookings from the Mobility segment in the September quarter increased 19% year over year on a constant-currency basis to $25.1 billion.
Uber’s Delivery business also performed well in the quarter, with segmental revenues growing 27% year over year on a constant-currency basis. Gross bookings from the Delivery segment in the September quarter rose 24% year over year on a constant-currency basis to $23.3 billion. Total gross bookings jumped 21% to $48.7 billion, ahead of our estimate of $48.3 billion.
Uber saw a 17% increase in its monthly active platform consumers to 189 million users in the third quarter. The platform recorded 3.5 billion trips, marking an 22% year-over-year rise, driven by both ride-hailing and delivery services. The company reported a free cash flow of $2.23 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 September quarter enabled it to maintain an excellent earnings surprise record. Uber has outpaced the Zacks Consensus Estimate in the past four quarters.
Uber Technologies price-eps-surprise | Uber Technologies, Inc. Quote
Uber expects fourth-quarter 2025 gross bookings in the $52.25-$53.75 billion range, representing growth of 17% to 21% year over year on a constant currency basis.
Despite the all-around outperformance, shares of the company declined following the earnings release, ending the trading session on Nov. 4 at $94.67, down 5.1% from the prior day’s closing.
The southward price movement was mainly due to the soft EBITDA guidance for the fourth quarter, given by the company. Management expects adjusted EBITDA to be in the range of $2.41-$2.51 billion. Our estimate is below the mid-point (i.e. $2.46 billion) of the guided range. Apart from the soft EBITDA projection, the commentary that autonomous vehicles (“AV”) are unlikely to be profitable for a few years, going forward, may have disappointed investors, contributing to the downward stock movement.
Despite the slip on Nov. 4, Uber has navigated the recent tariff-induced stock market volatility well, registering a 57% year-to-date gain, while the Zacks Internet-Services industry has moved up 48%. Uber has also outperformed its main competitor, Lyft LYFT and fellow industry player, DoorDash DASH, so far this year.
From a valuation perspective, Uber is relatively expensive. Going by its price/earnings ratio, the company is trading at a forward earnings multiple of 27.87, above the industry average. The company has a Value Score of D. Lyft and DoorDash’s shares appear to be even more expensive, with a Value Score of B and F, respectively.
While Uber’s valuation may not appear particularly attractive at present and its high debt levels and currency-related challenges pose near-term risks, the outlook is far from bleak for this ride-hailing giant.
The company’s strategic diversification and shareholder-focused initiatives stand out as key positives. With a substantial market capitalization of $207.96 billion, Uber is well-equipped to weather economic turbulence. The company’s commitment to diversification — through acquisitions, geographic expansion and innovative product offerings — has helped mitigate risks and strengthen its market position.
Uber’s expansion into international markets underscores its focus on achieving global reach and reaping the benefits of geographical diversification. Moreover, the company’s disciplined investments have broadened its service portfolio and enhanced the competitive edge.
In the AV space, Uber is pursuing a partnership-driven strategy to capture opportunities in the emerging robotaxi market. By collaborating with multiple technology leaders, Uber has avoided the heavy R&D expenses tied to in-house AV development while still advancing its automation goals.
Overall, Uber’s scale, strategic investments and diversification initiatives provide a solid foundation for sustained long-term growth. Holding onto this Zacks Rank #3 (Hold) stock appears to be a prudent choice currently, while prospective investors might consider waiting for a more favorable 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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