Key Stats for Uber Stock
- 1-Day Price Change for Uber stock: -5%
- $UBER Share Price as of Nov. 4: $94.67
- 52-Week High: $102
- $UBER Stock Price Target: $110
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What Happened?
Uber (UBER) stock dropped 5% on Tuesday despite the ride-hailing giant reporting third-quarter results that beat Wall Street expectations across most key metrics.
Revenue came in at $13.47 billion versus the $13.26 billion expected, while gross bookings of $49.74 billion topped the $48.95 billion estimate.
The company also guided fourth-quarter gross bookings to be slightly above consensus, at $52.25 billion to $53.75 billion.
CEO Dara Khosrowshahi called it “our strongest growth since the end of 2023 and the largest trip volume increase in Uber’s history outside the post-Covid rebound.”
Trips surged 22% year-over-year to 3.5 billion, with monthly active users climbing 17% to 189 million. Both the Mobility and Delivery segments experienced acceleration, with Mobility trips increasing by 21% and Delivery trips growing at their fastest pace in four years.
Net income nearly tripled to $6.6 billion, but that figure included a massive $4.9 billion tax benefit and $1.5 billion gain from revaluing equity investments.
Adjusted EBITDA of $2.26 billion (up 33%) came in roughly in line with expectations.
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What the Market Is Telling Us About Uber Stock
The selloff in Uber stock appears driven by concerns that the company’s growth story is already priced in, combined with questions about the sustainability of margin expansion.
While the top-line numbers looked strong, investors seem focused on the guidance and what it implies about future profitability.
Uber has been deliberately moderating its pace of margin expansion as it invests in growth initiatives like autonomous vehicles, grocery and retail delivery, and new markets.
Adjusted EBITDA margins reached an all-time high of 4.5% of gross bookings, up 40 basis points year-over-year.
But management emphasized they’re prioritizing total profit dollar growth over margin percentage gains—a shift that may be giving some investors pause.
The company is making substantial investments in autonomous vehicles, which remain unprofitable today and likely won’t turn profitable for “a few years,” according to Khosrowshahi.
Uber is pursuing a “barbell strategy” in Mobility, using margins from premium products like Uber for Business and Uber Black to fund newer growth areas including AVs, Wait and Save, and shuttle services.
While this approach has worked historically for new product launches, it introduces near-term margin headwinds.
On the positive side, Uber stock benefits from several long-term tailwinds. Only 20% of users who have access to both Mobility and Delivery currently use both products, leaving enormous room for cross-platform growth.
The company’s Uber One membership program continues expanding—now in 42 countries versus 28 a year ago—with members spending 3x more than single-product users.
Grocery and retail delivery has reached a $12 billion annual run rate and is growing faster than restaurant delivery.
The partnership with NVIDIA announced during the quarter positions Uber to be a key player in the autonomous vehicle rollout.
The company is already seeing promising early signals in markets like Austin and Atlanta where Waymo vehicles operate, with those markets growing more than twice as fast as the rest of the U.S.
Despite the strong underlying fundamentals and impressive growth metrics, Uber stock is getting hit as investors digest the reality that margin expansion will be more gradual than some hoped.
The company remains committed to annual profit growth, but the pace of that growth—particularly as AV investments ramp—is creating near-term uncertainty.
With shares down over 21% from their 52-week high, the market is clearly recalibrating expectations for how quickly profitability will scale alongside the company’s explosive trip growth.
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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!
