Key Takeaways:
- The 2-Minute Valuation Model values Uber stock at $120 per share in 2 years.
- That’s a potential 33% upside from today’s price of $90 per share.
- Despite a projected EPS decline in 2025, analysts expect the stock to see over 20% annual EPS growth in 2026 and 2027.
- Wall Street remains highly bullish on Uber with 30 “Buy” ratings and a $95 median price target.
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Uber Technologies (UBER) has transformed from a troubled ride-hailing startup to a profitable global mobility and delivery platform.
After achieving consistent profitability and free cash flow generation, Uber now faces the challenge of maintaining growth momentum while balancing investments in emerging business lines.
With UBER stock now trading at $90, investors are questioning whether the company can continue its impressive run.
The stock’s earnings projections show an unusual pattern that requires careful analysis to understand the true value proposition. Let’s examine what’s behind the numbers.
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What is the 2-Minute Valuation Model?
Three core factors drive a stock’s long-term value:
- Revenue Growth: How big the business becomes.
- Margins: How much the business earns in profit.
- Multiple: How much investors are willing to pay for a business’s earnings.
Our 2-Minute Valuation Model uses a simple formula to value stocks:
Expected Normalized EPS * Forward P/E ratio = Expected Share Price
Revenue growth and margins drive a company’s long-term normalized earnings per share (EPS), and investors can use a stock’s long-term average P/E multiple to get an idea of how the market values a company.
Why UBER Stock Looks Undervalued
Forecast
Based on analyst estimates shown in the chart below, Uber’s earnings trajectory shows a distinctive pattern. EPS is projected to fall from $5.97 in 2024 to $3.60 in 2025 before improving back to $5.28 in 2027.
This earnings growth for Uber stock is likely to be driven by:
- Mobility market share gains: Uber continues to consolidate its leadership in ride-hailing, with consistent growth in both riders and drivers on the platform.
- Delivery business maturation: Uber Eats is achieving improved profitability as the delivery market rationalizes and the company optimizes logistics.
- Advertising revenue: Uber’s growing advertising business leverages the company’s massive user base and generates high-margin revenue.
- Membership growth: Uber One subscription service drives higher engagement, retention, and cross-platform usage between mobility and delivery.
- International expansion: As Uber expands its footprint and service offerings globally, markets outside the U.S. present significant growth opportunities.
For our valuation, we’ll estimate that Uber stock will reach $5 in EPS in 2027.
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Is Uber Stock Undervalued Right Now?
Uber stock currently trades at around 25x forward earnings, marginally above its 12-month historical average of 24x, as shown in the P/E chart.
While the stock’s valuation has moved higher in recent months, it continues to trade at a reasonable multiple in May 2025.
For our valuation, we’ll use a relatively conservative forward P/E multiple of 24x, slightly below where the stock trades today, acknowledging the volatile macro environment.
Fair Value of Uber Stock
Using our 2-Minute Valuation Model and applying a conservative approach:
- Conservative 2027 EPS estimate: $5
- Conservative forward P/E multiple: 24x
Expected Normalized EPS ($5) * Forward P/E ratio (24x) = Expected Share Price ($120)
The 2-year expected Uber stock price we would get from this valuation is $120 per share.
With Uber stock currently trading at around $120 per share, this implies a potential upside of 33% over the next two years or a 16% annualized return.
If Uber stock delivered these returns, it would outperform the market’s long-term average of about 10% per year.
Remember, this is just a valuation exercise, and we don’t know for sure what the stock’s price will be in the future.
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What is the Target Price for Uber Stock?
Analysts think that Uber stock could have a bit of upside today.
Analysts have an average price target of around $95 per share for Uber stock, indicating they see about 5% upside today based on its current share price:
Some analysts see even greater upside, with price targets ranging as high as $115 per share, suggesting potential upside of over 25% from current levels.
This wide range of targets reflects the opportunity and uncertainty surrounding high-growth companies like Uber.
Risks to Consider
Despite the bullish outlook, investors should be aware of several risks that could impact Uber’s growth trajectory:
- Regulatory challenges: Uber faces regulatory hurdles regarding driver classification and operating permits in various markets.
- Competition: The mobility and delivery spaces remain highly competitive, with well-funded rivals like Lyft, DoorDash, and international competitors.
- Economic sensitivity: A broader economic slowdown could impact discretionary spending on ride-hailing and food delivery services.
- Labor costs: Increasing driver incentives or regulatory changes around worker classification could pressure margins.
- Autonomous disruption: While Uber invests in autonomous technology, it could also face disruption if competitors advance faster in this space.
TIKR Takeaway
Uber presents a compelling investment case at its current valuation. The projected earnings decline in 2025 appears to be more of a temporary reset than a structural issue, as evidenced by the strong analyst consensus and projected recovery in 2026-2027.
Its transformation into a diversified mobility and delivery platform with multiple growth vectors is impressive. Uber has successfully built a network effect business with increasing returns to scale because each new rider and driver makes the platform more valuable for all participants.
The expansion into advertising, membership programs, and potentially autonomous vehicles provides additional upside beyond the core business.
Is Uber stock a buy over the next 24 months? Use TIKR to check the stock’s analyst price targets and growth forecasts to see if it is undervalued today.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
