After Earnings, Is Uber Stock a Buy, a Sell, or Fairly Valued?

Uber Technologies released its second-quarter earnings report on Aug. 5. Here’s Morningstar’s take on Uber’s earnings and stock.

Key Morningstar Metrics for Uber Technologies

• Fair Value Estimate
  : $76.00
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : Narrow
• Morningstar Uncertainty Rating
  : Very High

What We Thought of Uber Technologies’ Q2 Earnings

Uber’s second-quarter operating performance was in line with our expectations, with gross bookings narrowly beating management’s forecast by 2%. We view the third-quarter outlook as slightly soft, with decelerating top-line growth and margin expansion.

Why it matters: While autonomous vehicles remain small relative to the total footprint of ride-hailing (less than 1%), the key Uber debate remains the terminal impact of this new technology: leverage gained by removing drivers versus leverage lost from buying AVs and/or relying on too few providers. Current results don’t answer this key question, but we like certain defensive steps Uber is taking.

• On AVs, Uber is making progress with multiple partners (essential to the bull thesis) and spearheading an AV lab’s data sharing efforts to nurture this multipartner ecosystem. The firm also acknowledged Waymo dependency risk, but we view Tesla AV scaling as a key risk.
• Network-effect metrics, like total users and frequency (trips per user) remain strong, reinforcing Uber’s marketplace flywheel. Only about 30% of US gross bookings come from the top 20 cities, which provides some padding against AV encroachment in the near term.

The bottom line: We maintain our narrow moat rating and $76 fair value estimate as we balance the strength of Uber’s key marketplace metrics against our view that AV companies are willing to bypass Uber to control the rider relationship.

• We see the shares as slightly undervalued post-earnings, as the market seems to be aggressively pricing in terminal value risks associated with autonomy, but we would wait for a better entry point to provide extra margin for error.
• We remain bullish on food delivery marketplaces. A larger pool of drone and sidewalk robot companies gives food delivery marketplaces greater bargaining power over economics, a sharp contrast to Waymo’s clear leadership in ride-hailing AVs. Given the relative business mixes, this creates a better setup for DoorDash than for Uber.

The following are excerpts from Morningstar’s company report on Uber stock.

Fair Value Estimate for Uber Technologies

With its 3-star rating, we believe Uber stock is fairly valued compared with our long-term fair value estimate of $76. We project that Uber’s revenue over the next five years will grow 11% annually, on average, consistent with our understanding of the nascent but maturing ride-hailing market. We forecast gradually decreasing year-over-year growth in gross bookings starting at 14% in 2026 and progressing downward to 4% in 2035.

We believe Uber’s role as the premier demand aggregator in ride-hailing and delivery positions it well amid this potential technological inflection point in the industry. Still, we bake in some risk that AV companies will operate their own applications and compete directly with Uber over the long run.

Read more about Uber Technologies’ fair value estimate.

Economic Moat Rating

Uber operates as a dynamic marketplace that we believe warrants a narrow moat rating based primarily on network effects. While other rivals also enjoy network effects, none have Uber’s scale, which provides Uber with a cost advantage in which fixed costs are spread across more trips. The firm also fosters unmatched engagement, which provides an intangible asset in the form of user data. This user data contributes to virtuous cycles where increased trips lead to more data and more data leads to improved application performance and improved application performance leads to more trips. The strength of Uber’s network effect is the critical determinant of its ability to maintain returns above its cost of capital over time.

Read more about Uber Technologies’ economic moat.

Financial Strength

As of December 2025, Uber had approximately $7 billion of cash and approximately $10.5 billion of debt on its balance sheet. The debt obligations include a mix of senior unsecured notes, convertible notes, and refinanced term loans with staggered maturities extending as far as 2054. In the second quarter of 2025, Uber authorized up to $20 billion in share repurchases to offset dilution.

Capital expenditures had averaged less than $250 million per year since 2022, but it recently ticked up to $340 million in 2025, and we expect more increases in the near future as Uber will likely take some balance sheet risk to onboard new autonomous vehicles. Still, free cash flow generation has been extremely strong, with free cash flow/adjusted EBITDA conversion ranging from 83% to 130% since 2023.

By 2034, we estimate Uber’s cash from operations could exceed $20 billion, outpacing top-line growth due to operating leverage. As revenue growth moderates and margin expansion continues, we expect Uber to repurchase shares. Uber will also likely use any excess cash for further acquisitions or autonomous vehicles.

Read more about Uber Technologies’ financial strength.

Risk and Uncertainty

We assign Uber a Very High Uncertainty Rating. The main uncertainty and cause of near-term volatility is the potential impact of autonomous vehicles on the ride-hailing industry. AVs present both an opportunity and a risk. A partnership between Uber and an AV firm like Waymo or Tesla could allow for the removal of some human drivers and massive margin expansion for Uber.

The risk, however, is that AV companies encroach on Uber’s value proposition by quickly rolling out AVs while simultaneously designing additional exclusive demand-aggregation applications, effectively cutting Uber out. There are some environmental concerns around carbon emissions that could present themselves as a risk to the business model.

Read more about Uber Technologies’ risk and uncertainty.

UBER Bulls Say

• Uber’s role as the premier ride-hailing and delivery demand aggregator positions it as the perfect partner for autonomous vehicle companies looking to scale AV fleets and achieve high utilization rates.
• Strong core user base growth reinforces Uber’s network effect, generating a virtuous cycle wherein more riders on the platform encourage more drivers to join, and vice versa.
• Uber’s large user base provides rich data for further improvement to supply-demand matching algorithms, enhancing its proprietary fleet management software and value proposition to AV companies.

UBER Bears Say

• AV companies have a superior cost structure because AV companies do not need to pay drivers. AV companies will develop exclusive applications and effectively cut Uber out of the entire market.
• Uber’s value proposition to AV companies is fragile and concentrated on lower-margin fleet management services like charging and cleaning.
• Ridehailing is still a relatively new industry, which leaves plenty of room for increasing regulations. The mandatory classification of gig workers as full-time employees could compress margins and hurt the company.

This article was compiled by Irza Waraich.