Uber’s huge 60% Rally: Is the Stock Still a Buy or About to Hit the Brakes?

Uber Technologies (NYSE: UBER) has seen a remarkable year-to-date stock rally, with its share price increasing significantly. This article will examine the key drivers behind this surge, recap the company's latest earnings, analyze its current valuation, and explore what factors are critical for continued growth.

1. Top 5 Reasons Fueling Uber's YTD Stock Rally

Uber's impressive stock performance in 2025 is not a result of a single factor, but rather a combination of strategic and operational successes that have instilled new confidence in investors. The top five reasons fueling this rally are:

Uber Eats

1. Shift to Profitability: After years of prioritizing growth over profits, Uber has successfully demonstrated a consistent path to profitability. The company's focus on operational efficiency has led to its first-ever operating profit, a major milestone that has fundamentally changed the investment narrative around the stock.

   
   

2. Growth of Uber Eats and Advertising: The company's Delivery segment, primarily Uber Eats, has matured into a powerful and profitable business. This diversification beyond ride-hailing provides a stable revenue stream. Additionally, Uber's burgeoning advertising business, which leverages its massive user base, is a high-margin revenue driver that is increasingly contributing to the bottom line.

   
   

3. Strong Network Effects: Uber's platform benefits from a powerful network effect. As more riders use the service, it attracts more drivers, which in turn leads to faster pickups and a better experience for riders, further driving user acquisition and retention. This virtuous cycle creates a strong competitive moat.

   
   

4. Strategic Autonomous Vehicle Partnerships: Instead of shouldering the immense cost of developing its own autonomous vehicles, Uber has wisely shifted to a partnership model. By collaborating with leading companies like Waymo and Nuro, Uber positions itself to capitalize on the future of self-driving cars without the significant capital expenditure and risk associated with building the technology in-house.

   
   

5. Share Repurchase Program: The company's announcement of a new, substantial share repurchase authorization demonstrates its commitment to returning value to shareholders. This move signals management's confidence in the company's future cash flow and profitability, providing a solid support base for the stock price.

   
   

2. A Recap of Uber's Recent Earnings Results

Uber's latest quarterly earnings report reinforced the positive momentum, with the company beating analyst expectations on both the top and bottom lines.Key highlights from the Q2 2025 report include:

• Revenue Growth: Revenue climbed 18% year-over-year to $12.7 billion, driven by robust performance in both the Mobility (ride-hailing) and Delivery segments.

  
  

• Profitability: The company reported an income from operations of $1.5 billion, an impressive 82% year-over-year increase.¹² Adjusted EBITDA surged by 35% to $2.1 billion.

  
  

• User and Trip Growth: The platform's user base continued to expand, with Monthly Active Platform Consumers growing by 15% to 180 million. Total trips on the platform increased by 18% year-over-year.

  
  

• Strong Cash Flow: Uber's operating cash flow was strong at $2.6 billion, and free cash flow was $2.5 billion, indicating that the company is effectively turning its operations into cash.

  
  

These results underscore that Uber's strategy of disciplined growth and cost management is paying off, and the company is a fundamentally stronger business than it was just a few years ago.

3. Is the Stock Price Overvalued?

To assess whether Uber's current valuation is justified, it's important to look at several key metrics:

• P/E Ratio: Uber's trailing twelve-month (TTM) P/E ratio is currently around 16.5x. This is significantly lower than some of its peers and the broader industry average, suggesting the stock may not be overvalued on a historical basis. The P/E ratio has come down dramatically as profitability has increased, reflecting a more mature and stable company.

  
  

• Forward P/E: The forward P/E ratio, which uses future earnings estimates, is also a positive indicator. The forward P/E is slightly below the current P/E, which suggests analysts expect earnings to continue to grow, making the stock more affordable relative to its future earnings potential.

  
  

• 14-Day RSI: The Relative Strength Index (RSI) is a momentum indicator. As of the latest data, Uber's 14-day RSI is approximately 65.5, which is in the "buy" range but not yet in the "overbought" territory (typically above 70). This suggests that while the stock has strong upward momentum, it is not yet at a level where a sharp pullback is imminent solely due to a technical overheating.

  
  

Based on these metrics, the stock does not appear to be grossly overvalued, especially when considering its improving profitability and strong growth trajectory.

Here's a concise table comparing Uber with peers Lyft and DoorDash, focusing on their most recent trailing P/E (TTM) and forward P/E:

Company	Trailing P/E (TTM)	Forward P/E
Uber	~16.0×	~29.5× to 33.2×
Lyft	~56× to 72×	~23×
DoorDash	~132× to 136×	~43× to 111×

Insights

• Uber trades at a relatively moderate trailing P/E (~16×) for a growth platform, but its forward P/E (~30–33×) reflects elevated expectations.

  
  

• Lyft demonstrates much higher trailing multiples (~56–72×), though forward P/E (~12–23×) is lower, implying future earnings estimates may catch up—or simply reflect current earnings weakness.

  
  

• DoorDash shows the highest trailing P/E (~132–136×), indicating very high valuation relative to current profits; forward P/E (~43–110×+) remains high, suggesting continued growth expectations or limited near-term profit visibility.

4. Top 5 Things That Need to Continue to Push the Stock Even Higher

For Uber's stock to continue its upward momentum, several key factors must remain in its favor:

1. Sustained bookings & active-user growth — continued mid-teens or better topline growth, especially in mobility and delivery, will reinforce the growth narrative. Watch monthly active platform customers, trips per user, and geographic mix.

   
   

2. Execution on margin expansion / free cash flow — positive operating leverage and consistent FCF improvement will justify higher multiples and make buybacks meaningful. Investors will watch adjusted EBITDA margins and free cash flow conversion.

   
   

3. Buyback execution and capital allocation discipline — announcing a big buyback is one thing; deploying it opportunistically (and transparently) will materially support the stock. Clear communication around timing and size matters.

   
   

4. Proof points from autonomous / AI investments (optional upside) — any credible progress that shows AVs or AI routing materially lowering cost per ride or new revenue streams will be a multiple booster — but this is optional and longer-dated.

5. Favorable macro / credit conditions — lower interest rates and positive liquidity flows into growth names help multiples expand; conversely, a hawkish Fed or risk aversion would pressure the stock. Investors will also watch fuel and labor cost trends that affect driver economics.