UBER Hits a 52-Week High: Reasons Why the Stock is Worth Buying Now
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Uber's efforts to gain a stronghold in the evolving but highly lucrative autonomous ride-sharing market are highly impressive. Uber is reportedly eyeing the U.S. arm of China's self-driving car company Pony AI PONY. Uber's former CEO, Travis Kalanick, is reportedly in talks with the San Francisco-based ride-hailing giant to help fund his plan to buy Pony AI's U.S. arm. In the event of Uber's acquisition of Pony AI's U.S. unit materializing, the former will gain a stronger foothold in the AV space.
Among its many AV-related partnerships, Uber already collaborates with Pony AI to deploy the latter's robotaxis onto the Uber platform. By adopting this partnership-driven approach, Uber has avoided the massive R&D costs associated with developing autonomous systems independently. Lyft is also aiming to be a key player in the AV market, highlighting the immense competition in the space. Lyft, too, has signed several agreements in this regard.Uber's dominant market share in the ride-hailing industry also gives it a unique advantage in the AV space. With its vast network of drivers and customers, Uber can quickly scale autonomous services once the technology matures. Its app is designed to integrate AVs from multiple partners, giving users a variety of options. With the future of mobility being autonomous, UBER is one stock that seems to be hitting the right notes.
: Uber surpassed the Zacks Consensus Estimate for earnings in the last four quarters despite challenging market conditions, the average beat being 212.3%.
Uber Technologies price-eps-surprise | Uber Technologies Quote
: The Zacks Consensus Estimate for the second and third quarters of 2025, along with full-year 2025 and 2026, has seen upward revisions over the past 60 days. The positive revision trend reflects confidence in UBER's ability to continue delivering strong financial performances.
Image Source: Zacks Investment Research
: Uber is well-positioned to weather short-term challenges, with $7.2 billion in cash and equivalents at first-quarter 2025-end. The company's current ratio (a measure of liquidity) is above 1. Uber reported a free cash flow of $2.25 billion in the first quarter of 2025, up 66.6% year over year, highlighting its financial bliss. The firm's $7-billion buyback program, announced last year, reflects confidence in its financial stability and future performance.
Commendable Expansion Efforts: Even though Uber's primary business is ridesharing, it has diversified into food delivery and freight over time. Diversification is imperative for big companies to reduce risks, and UBER has excelled in this area. The company has engaged in numerous acquisitions, geographic and product diversifications, and innovations. Uber's endeavors to expand into international markets are commendable and provide it with the benefits of geographical diversification. Prudent investments enable Uber to extend services and solidify its comprehensive offerings.
Strong Q2 Guidance: In the June quarter, gross bookings are anticipated to be $45.75-$47.25 billion, indicating growth of 16-20% on a constant-currency basis from second-quarter 2024 actuals.
Our estimate for second-quarter 2025 gross bookings is pegged at $45.7 billion. In the second quarter, adjusted EBITDA is estimated to be $2.02-$2.12 billion, suggesting year-over-year growth of 29-35%.
Uber's Wall Street average price target of $97.81 per share indicates an upside of 4.5% from the current levels. Despite hitting a 52-week high on July 7, it is still an opportune time to buy UBER, thanks to its strong fundamentals, strong guidance and positive estimate revisions. The Zacks Consensus Estimate for 2026 implies a 15.2% year-over-year increase in sales and a 21.8% rise in EPS, signaling strong growth potential ahead.
UBER has a Zacks Rank #2 (Buy) and a Growth Score of A at present.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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