When you think of the ride-hailing market, Uber Technologies (UBER 2.54%) is probably the first company that comes to mind. The innovative app-based business completely disrupted the taxicab industry. It has a presence in more than 70 countries. And it has become so powerful that its name is interchangeably used as a verb.
You're not alone if the company is on your investing radar. Is this growth stock a buy, sell, or hold in 2025?
Profitable growth
Uber typically has had no issue expanding the business. In the past five years, its revenue is up 212%, from $14.1 billion in 2019 to $44 billion in 2024. This huge gain occurred during a pandemic, high inflation, rising interest rates, and ongoing economic uncertainty. This proves that Uber has the ability to navigate whatever comes its way.
But the problem has always been the lack of profitability and resulting financial weakness. This is changing. After posting a worrying operating loss of $3.8 billion in 2021, the company improved its income statement drastically by reporting $2.8 billion in operating income last year. The consensus analyst forecast from Wall Street is for this important profitability metric to increase at a compound annual rate of 55% between 2024 and 2027.
NYSE: UBER
Key Data Points
Competitive landscape
Uber faces competition, without a doubt. Lyft and DoorDash are here in the U.S. And internationally, there are major rivals as well.
However, Uber has developed the scale that showcases its dominance. As of Dec. 31, it counted 171 million active users. And last year, the company reported $162.8 billion in gross bookings.
According to Bloomberg Second Measure, Uber controls three-fourths of the ride-hailing market in the U.S. And while it's substantially behind DoorDash, which had 67% delivery market share in 2024 in the U.S., Uber is uniquely positioned because it has both the mobility and delivery segments under one roof.
Investors should know about Uber's network effect, its key competitive strength. As more riders, drivers, and restaurants join, it makes the entire platform more valuable to everyone else.
For these stakeholders, Uber might be an app that's impossible to delete. Consumers need to go places and appreciate getting things delivered to their doorstep. Drivers and couriers benefit from being able to monetize their free time in a way that wasn't possible two decades ago. And restaurants, despite some not being pleased with the fee Uber charges, are certainly happy with the incremental revenue they can generate.
The threat of autonomous vehicle (AV) technology is something investors need to pay attention to. The worst outcome is if someone launches a wildly successful robo-taxi platform, giving consumers rides at much cheaper prices. But it appears this is a long way happening, whether it's technical, regulatory, or a consumer trust hurdle. Furthermore, Uber understands the value of having a solid technological foundation and direct stakeholder relationships, which have helped it enter numerous partnerships with AV players.
Know what you're paying for
Uber shares haven't had a good year, as they are down 7% in the past 12 months (as of April 10), lagging the Nasdaq Composite index, which is essentially flat during that same time. The internet stock also trails the broader index since its initial public offering in May 2019. That performance over a longer time horizon can be discouraging.
As mentioned, though, Uber has the traits that would make many observers agree that this is a high-quality business. The growth, profitability, and network effects are all there. And management is well aware of, and positioning the company to benefit from, changing developments happening with AV tech.
The stock is a solid buy, in my opinion. Investors can add the business to their portfolios by paying a forward P/E ratio of 21.4. That's an extremely compelling valuation to pay for a category-leading enterprise.
