Is UBER's Cheap Valuation Reason Enough to Invest in the Stock?

Uber Technologies UBER currently trades at a forward price-to-sales multiple of 2.59X, a discount to the Zacks Internet-Services industry’s average of 6.85X. Its shares look cheap compared with the S&P 500 as well. Rival Lyft LYFT trades at a further discount.

UBER’s P/S F12M vs. the Industry, the S&P 500 & LYFT

Now, the question is whether it is worth buying the stock at current prices. Let us dig deeper to find out.

Further Factors Working in Favor of UBER

Gross Bookings Growth: Uber continues to benefit from robust growth in gross bookings, reflecting strong and sustained demand across its platform. The company has been witnessing healthy double-digit increases in gross bookings in both its mobility and delivery segments.

In the fourth quarter of 2025, total gross bookings rose 22% year over year and on a constant-currency basis as well. UBER’s management stated on the conference call that 2025 was the fifth consecutive year of annual gross bookings growth of more than 20%. Looking ahead, Uber’s gross bookings momentum is expected to persist in the March quarter despite the ongoing geopolitical turbulence.

The company has projected gross bookings in the range of $52-$53.5 billion for the quarter, indicating constant-currency growth of 17-21% from first-quarter 2025 levels. Sustained growth in gross bookings strengthens Uber’s revenue pipeline, enhances operating leverage across its platform and reinforces network effects between riders, drivers and merchants. This momentum not only supports top-line expansion but also improves the company’s ability to scale profitability over time as higher transaction volumes spread fixed costs more efficiently across its ecosystem.

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. Recently, Uber inked a deal to acquire parking startup SpotHero, which was founded in 2011. SpotHero offers an app that enables users to reserve parking spaces in more than 400 North American cities. The deal is expected to close by June 30, 2026. In the event of the deal materializing, Uber will introduce a native, in-app parking reservation feature powered by SpotHero, focusing on parking options for commuters as well as at events, venues and airports. Over time, Uber One members may also receive parking-related benefits as part of their membership.

The company is looking to strengthen Uber Eats, its online food ordering and delivery platform, and has inked multiple deals recently on that front. Recently, Uber, through Uber Eats, announced the launch of T&T Supermarket. This is Canada’s largest Asian supermarket chain, offering an extensive assortment of authentic ingredients ranging from everyday pantry essentials to specialty items that are often difficult to find. The supermarket chain operates stores across Alberta, British Columbia, Ontario and Quebec.

Impressive Earnings History: Uber has outpaced the Zacks Consensus Estimate for earnings in three of the past four quarters, missing the consensus mark on the other occasion. The average beat is 104.6%.

Uber Technologies Price and EPS Surprise

Uber Technologies price-eps-surprise | Uber Technologies Quote

Some Headwinds That Cannot be Ignored

Unimpressive PricePerformance: Shares of Uber have declined in double-digits over the past six months, underperforming the Zacks Internet-Services industry as well as the S&P 500 index. Lyft’s shares have performed even more dismally.

6-Month Price Comparison

Fears of Increased Robotaxi Competition: San Francisco-based Uber’s shares have dropped primarily on concerns regarding competition in the robotaxi and autonomous driving space. Last year, Alphabet’s GOOGL Waymo revealed that it had crossed 450,000 weekly paid rides, almost double the 250,000 reported in April 2025. The increasing use of autonomous rides through Alphabet’s robotaxi unit is impacting Uber’s core business – ride-hailing.

Launched in 2009 as part of Google’s Self-Driving Car unit before being reorganized into an independent company under the Alphabet umbrella, Waymo has already started large-scale, fully driverless services in multiple U.S. cities. Its entire fleet runs without safety drivers. Uber’s rival Lyft is also focusing on becoming a key player in this competitive AV space.

Regulatory and Macroeconomic Risks: In December 2025, taxi drivers in Barcelona staged protests in support of legislation that could significantly reduce ride-hailing licenses. The proposed law would restrict Uber’s ability to operate at scale, potentially threatening its market share in one of Europe’s busiest tourist destinations. Similar anti-Uber sentiment has surfaced elsewhere. Apart from the regulatory headwinds, the geopolitical woes have the potential to hurt Uber’s operations. High fuel prices due to the ongoing Middle East conflict have affected both drivers and riders, leading to reduced demand in some areas.

Not an Opportune Time to Buy UBER Stock

While Uber’s weak stock performance, labor unrest and geopolitical woes present near-term challenges, the outlook for the ride-hailing giant remains far from discouraging.

The company’s strategic diversification and shareholder-focused initiatives continue to serve as key strengths. With a market capitalization of $154.63 billion, Uber remains well positioned to navigate economic uncertainties. Its ongoing commitment to diversification — through acquisitions, geographic expansion and innovative product offerings — has helped reduce risks and reinforce its competitive standing.

Uber’s expansion into international markets highlights its emphasis on building a global presence and benefiting from geographic diversification. In the rapidly growing autonomous vehicle space, Uber is adopting a partnership-driven strategy to capitalize on emerging opportunities. By collaborating with leading technology companies, the firm has avoided the substantial R&D costs associated with developing AV technology in-house while still progressing toward its automation ambitions. Uber's valuation picture adds to its appeal.

Overall, Uber’s scale, strategic investments and diversification efforts provide a strong foundation for sustained long-term growth. Despite the recent unfavorable price performance, maintaining a position in this Zacks Rank #3 (Hold) stock appears to be a sensible approach for now, while potential investors may prefer to wait 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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