Is It Time to Give Up on Uber Stock?

Shareholders in Uber Technologies (NYSE: UBER) may feel they are in a difficult position. The stock sells for just below all-time highs, yet investors seem to have soured on the stock. A miss on revenue and the fact that Tesla's Elon Musk did not express interest in buying out the company seems to have changed the sentiment.

Between the report and Musk's sentiments, investors may not know what to do. Should they add more shares with a slightly discounted price, or is now the time to give up on Uber stock?

Image source: Getty Images.

Making sense of Uber stock

In the most recent earnings report, Uber delivered both good and bad news to investors. In the first quarter of 2025, the company reported revenue of $11.5 billion, a 14% increase from the same quarter last year. That missed analyst estimates by about $86 million, and the results represent a slowdown from 2024, when revenue grew by 18% yearly.

This also occurred as the number of trips grew 18% annually in Q1, only slightly below the 19% rise in 2024. More frequent trips by monthly active platform consumers (MAPCs) likely explain why the number of trips grew faster than revenue, since many of these frequent riders likely joined its Uber One membership program, thereby receiving discounts.

Still, Uber beat earnings estimates by a wide margin, reporting almost $1.8 billion in net income for Q1. Admittedly, a $402 million income tax benefit helped significantly, but it is still a vast improvement, considering Uber lost $654 million in the year-ago quarter.

Also, investors should not look for much more of a slowdown. Analysts forecast 15% revenue growth for both 2025 and 2026, a testament to the platform's growing popularity.

Despite the concerns, Uber stock is up nearly 40% over the previous 12 months. Furthermore, a falling valuation and the aforementioned income tax benefit have now taken Uber stock to a P/E ratio of just 16. Still, even when measured by the 25 forward P/E ratio (which excludes the income tax benefit), Uber looks like a reasonably priced stock.

Uber's robust business

Moreover, investors have good reason to see Musk's disinterest in buying Uber as a good thing. Uber's mobility and delivery segments delivered double-digit growth to shareholders, growing revenue by 15% and 18%, respectively, on an annual basis. Though freight revenue dropped by 2% yearly, it represented only 11% of the company's revenue in Q1.

Additionally, that growth does not reflect its potential to evolve into a self-driving car stock. Uber has built partnerships with companies like Alphabet's Waymo and May Mobility, and users can already request such rides in Phoenix, Austin, and Atlanta.

Even though Uber does not design the vehicles, it offers a competitive edge in this industry. With its MAPC user base of 170 million, it provides an established platform and a vast network of customers needing ride-sharing services.

Also, the autonomous services are unlikely to lead to the demise of human drivers, at least not anytime soon. With that, it is probable that offering both human and autonomous drivers could give Uber a competitive advantage that a company like Tesla is unlikely to deliver.

Moving forward with Uber

The state of Uber indicates that now is not the time to give up on Uber stock. Indeed, it is not a good look when one misses revenue estimates, and positive accolades from Musk would have probably boosted Uber stock.

Nonetheless, Uber's two largest segments continue to grow revenue at double-digit rates, making it attractive even at a 25 forward P/E ratio. Moreover, success with autonomous vehicles could further boost revenue as its ecosystem becomes critical to personal transportation.

Considering those potential benefits, interested investors should ignore the revenue miss and comments from Musk and buy Uber stock.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Will Healy has positions in Uber Technologies. The Motley Fool has positions in and recommends Alphabet, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.