We are experiencing some temporary issues. The market data on this page is currently delayed. Please bear with us as we address this and restore your personalized lists.
Uber's revenue growth, coupled with a scalable business model, is now resulting in huge profit generation.
Despite macro uncertainty, Uber is reporting strong financial performance, which may indicate that demand for its apps could be resilient to a recession.
Investors aren't being asked to pay a steep valuation for a company that still has meaningful expansion potential.
Uber(NYSE: UBER) shares have been in the fast lane. Just this year, they're up 48% (as of May 28). In the past five years, they have soared an impressive 156%, crushing the broader market by a wide margin. The market has become enthused with the business, thanks in large part to strong financial results under CEO Dara Khosrowshahi's leadership.
It has been remarkable to watch Uber's ascent from a scrappy start-up in 2009 to now being a global enterprise. This growth stock is a winner in the eyes of investors. But where will Uber be in five years?
Image source: Getty Images.
Uber is hitting its stride financially
It's worth immediately calling out that this business is now generating substantial profits, which critics probably never thought would become a reality. This perspective was understandable; in 2019, Uber reported a massive operating loss of $8.6 billion. An increasing focus on efficiencies, expense controls, and profitable growth has supported an expanded bottom line, with operating income totaling $1.2 billion in the first quarter of 2025 alone.
Uber's earnings power should continue improving in the years ahead. This is technically a software business, after all. And that means it should scale up in a profitable manner, which is precisely what we've seen in recent years. The leadership team believes adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) will grow by up to 40% per year between 2024 and 2027.
Is Uber recession-proof?
Economists, analysts, corporate executives, and consumers are all worried about the direction of the economy. President Donald Trump's trade announcements are also taking everyone on a roller coaster ride of confidence and uncertainty.
Uber's success in the face of this unfavorable backdrop is notable. Revenue was up 14% in Q1, propelled by a 14% jump in gross bookings and 18% more trips completed. This should make investors wonder whether Uber is somewhat recession-resistant. In tough times, consumer spending might generally be under pressure, but people will still need to get from place to place and want food and groceries delivered.
In the quarters ahead, it will be interesting to see how Uber's key financial metrics trend. But so far, investors should be encouraged.
Growth at a reasonable valuation
Besides giving investors confidence that it should be able to successfully navigate any economic turmoil, Uber appears to have meaningful long-term growth potential. Khosrowshahi said that "only [about] 5% of the adult population in our operating footprint" is a monthly active user. And there's room to boost the frequency at which people use the company's apps.
The Uber One subscription, another growth area, saw a year-over-year membership increase of 60% in 2024. These users spend more on the platform and use the services more often.
Powered by Money.com - Yahoo may earn commission from the links above.
Digital advertising is another growth vector, with Uber generating $1.5 billion in annualized run-rate revenue in Q1. With the ability to collect incredible amounts of data, Uber should continue to be a valuable ad partner for many businesses.
Then there's autonomous vehicle (AV) technology. Because of Uber's massive scale, as exemplified by 170 million monthly active users, it's no wonder it's signing up AV partners left and right. These tech enterprises see Uber as a critical partner for reaching a huge customer base and supporting further development, adoption, and commercialization.
"We are confident that AV technology is the single greatest opportunity ahead for Uber," the CEO said.
Uber shares are riding some strong momentum right now. Even with so much optimism surrounding the business these days, I view the valuation as compelling. The stock trades at a forward price-to-earnings ratio of 24.7. Add this to the trajectory of Uber's earnings, and I wouldn't be surprised if shares double between now and 2030.
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 10 best stocks 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 whenNetflixmade this list on December 17, 2004... if you invested $1,000 at the time of our recommendation,you’d have $638,985!* Or when Nvidiamade this list on April 15, 2005... if you invested $1,000 at the time of our recommendation,you’d have $853,108!*
Now, it’s worth notingStock Advisor’s total average return is978% — a market-crushing outperformance compared to171%for the S&P 500. Don’t miss out on the latest top 10 list, available when you joinStock Advisor.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.
