Shares of Uber Technologies UBER have declined 8.8% over the last three months, underperforming the Zacks Internet-Services industry and the S&P 500 Index, of which Uber is a key member. In comparison, shares of rival Lyft LYFT have dropped even more steeply in the same timeframe.
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San Francisco-based Uber’s shares have dropped primarily on concerns regarding competition in the robotaxi and autonomous driving space. Last month, Alphabet’s GOOGL Waymo revealed that it had crossed 450,000 weekly paid rides, almost double the 250,000 it 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. High operating costs are also hurting UBER stock.
Despite the recent drop, UBER’s robust fundamentals can’t be ignored. The pullback over the past three months might be an opportune moment for long-term investors to buy UBER shares. Currently priced at $84.85, the stock is 16.8% below its 52-week high, leaving ample room for growth.
Commendable Expansion Efforts: Although Uber’s core business is ride-hailing, it has steadily expanded into areas like food delivery and freight. Diversification is crucial for large companies to manage risk, and Uber has been particularly effective in doing so through acquisitions, geographic expansion, new product offerings and innovation. Its efforts to grow internationally are noteworthy, as they provide the added advantage of geographic diversification. By making strategic investments, Uber continues to broaden its services and strengthen its overall platform.
The company is also focused on boosting Uber Eats and has signed several recent agreements to support that goal. Uber Eats is the online food ordering and delivery platform of Uber. Last year, Uber inked a deal with retailer Best Buy BBY for on-demand delivery. The deal brings consumer electronics from more than 800 stores to the Uber Eats platform. The partnership allows Uber Eats and Best Buy to make the latest technology more accessible than ever, thereby reflecting the deal’s customer-friendly nature. The association with Best Buy to facilitate electronics delivery strengthens Uber’s delivery segment and is aimed at diversifying its delivery ecosystem.
Recently, Uber and The Kroger Co. KR announced that nearly 2,700 Kroger Family of Companies stores will now be available across the Uber Eats, Uber, and Postmates apps. This partnership aligns with Uber’s strategy to increase options for millions of households. In addition to Kroger’s floral and sushi offerings already listed on Uber Eats, customers can now shop full-store selections from Ralphs, Fred Meyer, King Soopers, Smith’s, Fry’s, Harris Teeter, Mariano’s, and other Kroger banners, and schedule deliveries based on their convenience.
Gross Bookings Growth: Uber continues to benefit from strong growth in gross bookings, with both its Mobility and Delivery segments delivering solid double-digit gains, highlighting sustained demand for its services. As economic activity has largely normalized in the post-pandemic environment, people have resumed commuting and traveling more regularly, driving healthy momentum in Uber’s Mobility business.
With rider activity improving, Mobility gross bookings posted an impressive performance and supported the company’s third-quarter results. In the September quarter, Mobility segment gross bookings rose 19% year over year on a constant-currency basis to $25.1 billion, while Delivery segment gross bookings increased 24% year over year on a constant-currency basis to $23.3 billion. Overall, total gross bookings climbed 21% to $48.7 billion.
Uber expects fourth-quarter 2025 gross bookings to come in between $52.25 billion and $53.75 billion, implying constant-currency year-over-year growth of 17% to 21%.
Rosy Growth Projections & Surprise History: The Zacks Consensus Estimate for 2025 earnings has been revised upward by 18.6%. The Zacks Consensus Estimate for 2025 sales has been revised 18.1% higher. The company surpassed the Zacks Consensus Estimate for earnings in each of the last four quarters by an average in excess of 200%.
UBER Shares Cheap: The stock is undervalued compared with its industry. It is currently trading at a price-to-sales multiple of 2.9, lower than the industry levels.
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Based on the abovementioned tailwinds, investors should consider parking their cash in UBER despite the recent price weakness. The company currently carries a Zacks Rank #2 (Buy).
The Wall Street average target price of $112.05 for UBER stock suggests an upside of more than 32% from the current levels.
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This article originally published on Zacks Investment Research (zacks.com).
