Uber: A Quick Look at Valuation at All-Time Highs

With Uber trading at all-time highs, investors are increasingly asking whether the stock still offers compelling value, or if most of the upside has already been realized.

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Market Recap

This week, the US stock market posted its strongest gains of 2025, fueled by easing inflation data and a temporary truce in US-China trade tensions. The S&P 500 jumped 5.3%, the Nasdaq soared 7.2%, and the Dow rose 3.4%, putting major indexes near all-time highs.

April's inflation reports came in cooler than expected, with the Consumer Price Index showing its slowest annual increase since 2021 and the Producer Price Index posting its biggest drop since 2009. These data points, along with reduced trade friction, raised hopes for potential Federal Reserve rate cuts. However, consumer sentiment slipped in May due to inflation concerns, and some analysts warned that market valuations may be stretched, especially with earnings growth forecasts being revised downward. Additionally, Friday’s expiration of $3.4 trillion in options contracts could introduce volatility in the coming week.

Despite the strong rally, investors remain cautiously optimistic, watching for further economic and policy signals.

Uber’s Drive to All-Time Highs

Image of Uber Sign. Source: Reuters.

UBER 0.00%↑ Uber has demonstrated strong performance recently, with its stock price reaching $91.79, marking a 10.95% rise just over the past week.

In the first quarter of 2025, Uber reported significant financial growth. Revenue increased by 14% year-over-year to $11.5 billion, while net income reached $1.8 billion. The company also achieved an adjusted EBITDA of $1.9 billion, up 35% from the previous year, and generated $2.3 billion in free cash flow.

Uber Revenue Breakdown. Source: FinChat.

Uber's core businesses have shown robust growth. Mobility gross bookings rose 13% year-over-year to $21.2 billion, and Delivery bookings increased by 15% to $20.4 billion. The company also expanded its active driver and courier base to 8.5 million globally, a 20% increase from the previous year.

Uber MAPCs and Total Trips. Source: FinChat.

Investor confidence in Uber has been bolstered by significant developments. Notably, Pershing Square Capital Management, led by Bill Ackman, disclosed a $2.2 billion stake in Uber, acquiring 30.3 million shares during the first quarter of 2025. Ackman praised Uber as "one of the best managed and highest quality businesses in the world." Also, David Tepper’s Appaloosa Management significantly boosted its stake in Uber last quarter, increasing its position by 113%, according to the latest 13F filings.

Additionally, Uber has introduced new features aimed at enhancing user experience and affordability. These include the "Price Lock" pass, allowing riders to avoid surge pricing, and the "Savings Slider" tool, which helps users find cheaper grocery alternatives through Uber Eats, and a "Route Share" service that offers cheaper rides for shared trips along busy corridors.

With Uber trading at all-time highs, investors are increasingly asking whether the stock still offers compelling value, or if most of the upside has already been realized. In today’s issue, we’ll dive into that very question and assess whether Uber’s current valuation still leaves room to run.

Valuation

Even after the rise in Uber’s share price, the company still trades at a rather attractive valuation at a 6% earnings yield and a 4% FCF yield.

Uber Earnings Yield and FCF Yield. Source: FinChat.

Let’s model a few scenarios to get an idea of future returns.