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Yahoo
8 minutes ago
- Yahoo
Uber Stock Looks Expensive -- or Does It?
Key Points Uber is no longer a cash-burning hypergrowth company. It has a diversified platform upon which it can further grow its business. The rideshare leader's premium valuation could be justifiable. 10 stocks we like better than Uber Technologies › Uber Technologies (NYSE: UBER) has come a long way from its early days as a cash-burning disruptor of the taxi industry. Today, it's a profitable global platform with multiple engines of growth that span mobility, food delivery, logistics, and advertising. But after its share price has more than doubled in the past two years, the stock is no longer cheap. With a trailing price-to-sales (P/S) ratio of around 4.6, it's fair for investors to ask: Has the stock run too far ahead of its fundamentals? While the valuation looks high at first glance, the underlying business might justify the premium. Profitability is no longer just a promise For years, Uber followed a growth-at-all-costs strategy. That's no longer the case. After delivering its first annual profit in 2023, Uber delivered higher revenue and earnings in 2024. Operating income more than doubled from $1.1 billion to $2.8 billion in 2024, and free cash flow also more than doubled from $3.4 billion to $6.9 billion. Uber's profitability streak continued in Q1 2025 when it generated $1.2 billion in operating income on $11.5 billion of revenue. Free cash flow expanded 66% year over year to $2.3 billion. This all demonstrates that its profitability isn't just a temporary condition. The company has fundamentally realigned its business and cost structure, and the results are showing in growth and margins. A multi-engine platform Uber might have started as mainly a ride-hailing operator, but in recent years, it has evolved into a diversified platform. That gives the company multiple ways to expand. Mobility remains its core business, and it's still growing nicely and delivering solid margins and profits thanks to its leadership position in most of its markets. Similarly, delivery -- its second-largest business by revenue -- is now profitable and continues to expand into higher-value verticals like groceries and alcohol. Freight, while still a relatively small revenue contributor that is almost breaking even, adds to the company's long-term optionality in logistics and enterprise transportation. Beyond its core segments, Uber has quietly worked on its monetization, scaling smaller businesses like Uber Ads (advertising) and Uber One, its membership subscription business. This blend of services gives Uber an edge over pure-play delivery or rideshare companies, and it has a huge pool of 150 million monthly active users, plus a vast merchant base, to monetize. Uber's platform also enjoys powerful network effects. As more users join it, it attracts more drivers and merchants. In turn, that drives more transactions, making it even more attractive to customers. That flywheel doesn't just fuel growth -- it also generates a growing pool of first-party data. And with that data, the company's other services like Uber Ads become more effective, enabling better targeting and higher-margin monetization across the ecosystem. And let's not forget other opportunities exist in areas like autonomous ride-hailing and delivery, or its international expansion. While these businesses are still nascent, they have huge growth potential that could rival, if not exceed, Uber's core businesses. Putting Uber's valuation into context Trading at 4.6 times sales, Uber is by no means a bargain. While it's still some distance from the peak P/S of 10.1 that it reached in 2021 during the pandemic, it has about tripled the low point of 1.6 touched in mid-2022. Today, Uber's valuation sits close to midway between the valuations of peers DoorDash and Lyft. Company Trailing P/S Ratio Profitability Uber 4.6 Profitable DoorDash 9.1 Marginally profitable Lyft 1.0 Breakeven Data source: DoorDash is priced for high growth, but its margins are far thinner, and its business is less diversified. Lyft trades at a steep discount but lacks the scale, international reach, and cross-selling synergy that make Uber more compelling. So, while Uber's valuation is not cheap, it's not irrational either, especially considering its growing profitability and market opportunities. What it means for investors Uber stock may no longer be a value play, but it's also no longer just a growth story stock. Today, it has a track record it can point to with solid earnings, multiple growth levers, and optionality. For long-term investors, the question isn't whether Uber is cheap based on one headline metric. It's whether the company can keep executing across its different segments to sustain growth and expand margins. If it can do so, its current share price is quite reasonable. Should you invest $1,000 in Uber Technologies right now? Before you buy stock in Uber Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Uber Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DoorDash and Uber Technologies. The Motley Fool recommends Lyft. The Motley Fool has a disclosure policy. Uber Stock Looks Expensive -- or Does It? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
10 minutes ago
- Bloomberg
Japan's Political Uncertainty Sends Yen Higher: Markets Wrap
The yen strengthened after Japan's ruling coalition suffered a historical defeat in the weekend's upper house election, setting the stage for political uncertainty. Asian markets are poised for a mixed start. Japan's currency rose as much as 0.7% against the dollar, before paring back gains, after public broadcaster NHK reported that the ruling Liberal Democratic Party along with longtime partner Komeito lost its majority in the chamber. Nikkei stock futures were little changed, while onshore markets are closed for a holiday.
Yahoo
37 minutes ago
- Yahoo
The Lucid-Uber Robotaxi Deal: How Nvidia Will Also Benefit
Key Points Starting next year, Uber plans to deploy 20,000 or more Lucid electric SUVs equipped with the Nuro Driver autonomous system in over a dozen global cities. Nuro's Nuro Driver is a Level 4 self-driving system trained on and powered by Nvidia's artificial intelligence (AI) technology. 10 stocks we like better than Nvidia › On Thursday, shares of Lucid Group (NASDAQ: LCID), a Silicon Valley-based electric vehicle (EV) maker, soared more than 36% following the announcement of a premium robotaxi service deal with ride-hailing giant Uber Technologies (NYSE: UBER). My first thought upon seeing the news was "Yet another deal that will benefit Nvidia (NASDAQ: NVDA)!" The artificial intelligence (AI) tech leader wasn't mentioned in the press release, but I knew of the Nvidia connection. First, let's look at the Lucid-Uber deal and then see how Nvidia is poised to benefit. The Uber-Lucid-Nuro partnership The deal involves Uber procuring Lucid Gravity SUVs equipped with Nuro Driver, a Level 4 self-driving system, to use in a global premium robotaxi service developed exclusively for the Uber ride-hailing platform. Moreover, Uber plans to make "multi-hundred-million-dollar investments" in both Lucid and Nuro, an autonomous driving technology start-up also based in Silicon Valley. More specifically, Uber "aims to deploy 20,000 or more Lucid vehicles equipped with the Nuro Driver over six years in dozens of markets around the world." Its first launch will be in a major U.S. city and is expected to occur later next year. The first robotaxi prototype is already operating autonomously on Nuro's closed-course testing facility in Las Vegas. Nuro is a venture-backed start-up, which in April raised $106 million in a Series E funding round, bringing its valuation to $6 billion. Last year, the company shifted its main focus from developing delivery robots to licensing autonomous driving technology. Of course, this deal is great news for Lucid and Nuro, especially given the big injection of cash they'll receive from Uber. Lucid's vehicles -- the Air sedan and the new Gravity SUV – get high marks for performance and comfort, and sport industry-leading ranges. But it's notoriously difficult for vehicle start-ups to succeed because automakers have extremely high fixed-costs, so liquidity is always a big concern. At the end of the first quarter of 2025, Lucid had cash and short-term investments of $3.61 billion, and its free cash flow for the quarter was negative $589.9 million, which equates to an annual cash-burn rate of $2.36 billion. At its current cash-burn rate, Lucid's cash and short-term investments would last about 1.5 years. Why Nvidia is poised to benefit from the Uber-Lucid-Nuro robotaxi deal Uber, Lucid, and Nuro all have some type of driverless vehicle-related partnership with Nvidia, which isn't surprising as along with enabling the overall AI revolution, Nvidia's AI tech is a major enabler of the AI-powered driverless vehicle revolution. But it's the Nuro-Nvidia partnership that's relevant to Nvidia benefiting from the Uber-Lucid-Nuro robotaxi deal. Lucid EVs will be equipped with the Nuro Driver Level 4 autonomy system, according to the deal's press release. Nuro is using Nvidia's AI tech to power this system, as it announced at Nvidia's annual GTC (GPU Technology Conference) in March 2024. More specifically, the "Nuro Driver is built on NVIDIA's end-to-end safety architecture, which includes NVIDIA GPUs [graphics processing units] for AI training in the cloud and an automotive-grade NVIDIA DRIVE Thor computer running the NVIDIA DriveOS operating system inside the vehicle," according to an Nvidia blog. In other words, Nuro is using Nvidia's AI tech for both AI training of its self-driving vehicle system and AI inferencing, since Nvidia's DRIVE Thor, a supercomputer, is the "brains" inside the vehicle. So, not only does Nuro use Nvidia's data center AI products, which are available via all of the major cloud computing services, but the icing on top is that it must buy an Nvidia DRIVE Thor supercomputer for each vehicle that it equips with its Nuro Driver system. So, it seems safe to assume that every Lucid vehicle that Uber acquires for its new robotaxi service will have an Nvidia DRIVE Thor supercomputer inside it. That Uber and Lucid also have various individual partnerships with Nvidia provides further support for this assumption. For some context, Tesla (NASDAQ: TSLA) uses Nvidia's AI tech for training its self-driving vehicle system, called FSD (Supervised), with FSD standing for full self-driving. However, it does not use an Nvidia DRIVE system inside its vehicles. Tesla uses its internally developed tech -- or "AI chip" -- inside its vehicles. Last month, Tesla had a limited launch of its robotaxi service in Austin, Texas. The Uber-Lucid-Nuro robotaxi service is poised to compete with services operated by Tesla and Alphabet's Waymo, which is currently the leader in the U.S. robotaxi space. Given Uber's ride-hailing service scale and considerable financial resources (since last year, its trailing-12-month free cash flow has exceeded that of Tesla), the newly planned premium robotaxi service could be a big winner. And the more successful the new Uber-Lucid-Nuro robotaxi service is, the more money Nvidia should make. Do the experts think Nvidia is a buy right now? The Motley Fool's expert analyst team, drawing on years of investing experience and deep analysis of thousands of stocks, leverages our proprietary Moneyball AI investing database to uncover top opportunities. They've just revealed their to buy now — did Nvidia make the list? When our Stock Advisor analyst team has a stock recommendation, it can pay to listen. After all, Stock Advisor's total average return is up 1,048% vs. just 180% for the S&P — that is beating the market by 867.59%!* Imagine if you were a Stock Advisor member when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* The 10 stocks that made the cut could produce monster returns in the coming years. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Nvidia, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy. The Lucid-Uber Robotaxi Deal: How Nvidia Will Also Benefit was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
