UBER Stock Plunges 23.4% in 6 Months:Time to Hold or Fold?
Shares of Uber Technologies UBER) have declined 23.4% over the past six months against the Zacks Internet-Services industry’s growth of 20.7%. However, it outperformed fellow industry players, Lyft LYFT and DoorDash DASH. Zacks Investment Research Image Source: Zacks Investment Research The downward price performance raises a question: Should investors cut their losses and exit, or is it…
Shares of Uber Technologies UBER) have declined 23.4% over the past six months against the Zacks Internet-Services industry’s growth of 20.7%. However, it outperformed fellow industry players, Lyft LYFT and DoorDash DASH.
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The downward price performance raises a question: Should investors cut their losses and exit, or is it worth holding UBER stock?
Regulatory and Macroeconomic Woes: 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.
Fears of heightened competition in the robotaxi and AV space: Uber’s shares have been hurt due to concerns regarding competition in the robotaxi and autonomous driving space. Last month, Alphabet’s GOOGL Waymo revealed that it doubled its paid rides per week in less than a year, providing 500,000 paid robotaxi rides every week across 10 U.S. cities. 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.
Dismal Q4 Results: Earlier this year, Uber reported lower-than-expected earnings per share for the fourth quarter of 2025. Moreover, its EPS guidance for the March quarter was timid. UBER’s increased investments for developing cheaper and more affordable mobility offerings like Moto, a two-wheeler product, to broaden its customer base, might have contributed to the subdued adjusted earnings per share guidance (65-72 cents) for the March quarter.
Moreover, the anticipation of Uber continuing to incur high costs, courtesy of its AV-related investments, may have kept investors wary, contributing to the downward stock movement.
Uber’s earnings outpaced the Zacks Consensus Estimate in three of the last four quarters, missing in the other quarter. The average beat exceeded 100%.
Uber Technologies, Inc. Price and EPS Surprise
Uber Technologies, Inc. price-eps-surprise | Uber Technologies, Inc. Quote
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.
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 fourth-quarter results. In the December quarter, gross bookings from the Mobility segment increased 19% year over year on a constant-currency basis to $27.4 billion.
Uber’s Delivery business also performed well in the quarter, with segmental revenues growing 29% year over year on a constant-currency basis. Gross bookings from the Delivery segment in the fourth quarter rose 26% year over year on a constant-currency basis to $25.4 billion. Total gross bookings jumped 22% to $54.1 billion.
Uber expects first-quarter 2026 gross bookings in the range of $52-$53.5 billion, representing 17-21% year-over-year growth on a constant currency basis.
From a valuation perspective, Uber’s shares are cheaper compared with its industry. Going by its price/earnings ratio, the company is trading at a forward earnings multiple of 20.04, below the industry average as well as DoorDash. The company has a Value Score of C, like Lyft. DoorDash has a Value Score of F.
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Uber’s recent price performance has been weak, with its elevated debt levels and geopolitical challenges creating near-term uncertainties. Nevertheless, the long-term outlook for the ride-hailing leader remains far from negative.
One of Uber’s key strengths is its strategic diversification and focus on shareholder value. With a sizable market capitalization of $147.79 billion, the company is well-positioned to navigate economic headwinds. Its diversification efforts — including acquisitions, expansion into new geographies and the introduction of innovative services — have played a crucial role in reducing risks and reinforcing its market standing.
Uber’s continued push into international markets highlights its ambition to establish a strong global footprint and benefit from geographic diversification. At the same time, its disciplined investment approach has expanded its range of services and strengthened its competitive position.
In the fast-growing autonomous vehicle (AV) segment, Uber is adopting a partnership-based approach to tap into emerging opportunities. By working with leading technology firms, the company has been able to sidestep the significant research and development costs associated with building AV capabilities internally, while still progressing toward its automation objectives.
Overall, Uber’s scale, strategic initiatives and diversification efforts create a strong base for long-term growth. Despite the recent pullback, maintaining a position in this Zacks Rank #3 (Hold) stock appears sensible for now. 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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