INITIATING COVERAGE

Uber Technologies, Inc. (NYSE: UBER)

Ride-Hailing & On-Demand Delivery Platforms

2026-02-28

1. Executive Summary

We initiate coverage of Uber Technologies (UBER) with a BUY rating and a $100 price target, representing ~37% upside from the current price of $72.83. Uber is the undisputed global leader in ride-hailing and a top-two player in food delivery, operating across 70+ countries with 202M+ monthly active platform consumers. The company generated $52B in revenue and $9.8B in free cash flow in FY2025, demonstrating a maturing business model with significant operating leverage. Our thesis rests on eight pillars spanning platform dominance, AV optionality, high-margin new verticals (advertising at $1.5B ARR, Uber One at 46M subscribers), and robust capital returns. We value UBER using a blended DCF (WACC ~9.2%, terminal EBITDA margin 22%) and arrive at an implied equity value of ~$100/share.

Investment Thesis (4 Pillars)

1. Global Mobility Platform Dominance: ~75% U.S. ride-hailing share, #1 or #2 in most international markets. 202M MAPCs and 13.6B annual trips create unassailable network effects. 60% of Mobility gross bookings are international, providing geographic diversification.
2. AV Orchestration Platform of the Future: Multi-partner AV strategy (Waymo, WeRide, Nuro/Lucid, Momenta, Wayve) positions Uber as the world's largest autonomous vehicle aggregation platform. AVs on Uber are 30% more utilized vs. standalone competitors. 15 AV cities targeted by end-2026.
3. High-Margin Revenue Diversification: Uber Ads surpassed $1.5B annual run rate (+60% YoY) with ~80% incremental margins. Uber One has 46M subscribers (+55% YoY) driving 3x higher spend and ~50% of total gross bookings. These flywheel businesses dramatically improve unit economics.
4. Expanding Profitability & Capital Returns: Adj. EBITDA of $8.7B (16.7% margin), FCF of $9.8B, with clear path to 20%+ margins by 2029E. $10B+ annual buyback capacity supports per-share value creation.

2. Company Overview

Uber Technologies, Inc. was founded in 2009 by Travis Kalanick and Garrett Camp in San Francisco, California. The company went public on NYSE in May 2019 at $45/share. Under CEO Dara Khosrowshahi (appointed September 2017, formerly CEO of Expedia), Uber has transformed from a growth-at-all-costs startup into a profitable, cash-generative platform.

2.1 Business Segments

Mobility (57% of Revenue)

• The world's largest ride-hailing platform connecting riders with drivers across 70 countries.
• Products: UberX, Uber Comfort, Uber Black, Uber XL, Uber Reserve, Uber Health, Uber for Business.
• Gross Bookings ~$105B in FY2025; Take Rate ~30%. Highest-margin segment.
• ~75% U.S. market share vs. Lyft at ~25%. International gross bookings are 60% of segment total.

Delivery (33% of Revenue — Uber Eats)

• On-demand food, grocery, alcohol, retail, and convenience delivery.
• Gross Bookings ~$85B in FY2025; Take Rate ~18-20%. Margins expanding rapidly.
• 26.1% U.S. food delivery market share (vs. DoorDash 60.7%). #1 or #2 internationally.
• New verticals: Grocery (Kohl's, Loblaws, Coles), retail, and alcohol expanding TAM beyond restaurants.

Freight (10% of Revenue — Uber Freight)

• Digital freight brokerage connecting shippers with carriers.
• Revenue ~$5.1B in FY2025 but segment still loss-making amid freight cycle downturn.
• Secular digitization of $260B U.S. freight brokerage market supports long-term growth.

2.2 Key Platform Metrics

2.3 Management

• Dara Khosrowshahi, CEO (since 2017): Transformed Uber from loss-making to FCF-positive. Previously CEO of Expedia for 12 years.
• Prashanth Mahendra-Rajah, CFO (since 2023): Formerly CFO of Analog Devices. Driving capital allocation discipline and shareholder returns.
• Andrew Macdonald, SVP Mobility & Business Ops: Oversees ride-hailing globally.

3. Sector Analysis

The global ride-hailing and on-demand delivery platform sector represents a combined TAM of ~$700B, with Uber's addressable market at ~$450B across its operating geographies. Key highlights:

• Global ride-hailing market: ~$175B in 2025, growing at 9-13% CAGR toward $350B+ by 2030.
• Global food delivery market: ~$290B in 2025, growing at 9-11% CAGR. Grocery/retail delivery expanding TAM to $400B+.
• U.S. ride-hailing duopoly: Uber ~75%, Lyft ~25% — structurally stable.
• U.S. food delivery: DoorDash 60.7%, Uber Eats 26.1% — competitive but consolidating.
• AV revolution: Waymo, Tesla, and others deploying robotaxis. Uber positioning as the orchestration layer.
• Gig worker regulation: EU Platform Workers Directive, UK worker classification — key risk factor.

For detailed sector analysis, see the companion Sector Overview document.

4. Financial Analysis

4.1 Revenue Trajectory

Uber has grown revenue from $17.5B in FY2021 to $52.0B in FY2025, a 31% CAGR. Growth has moderated from pandemic recovery levels but remains solid at ~18% in FY2025. Gross Bookings of $193.5B grew 19.4% YoY, indicating healthy underlying demand.

4.2 Profitability Inflection

Uber has undergone a remarkable profitability transformation. Adj. EBITDA swung from $90M in FY2021 to $8.7B in FY2025. GAAP operating income was $5.6B in FY2025, nearly double FY2024. Free cash flow of $9.8B demonstrates the capital-light nature of the platform model.

• Adj. EBITDA margin expanded from 0.5% (FY2021) to 16.7% (FY2025) — dramatic operating leverage.
• FCF margin of 18.8% in FY2025 — industry-leading among platform peers.
• Mobility EBITDA margin ~7.8% of GBs; Delivery margin ~3.6% of GBs and expanding.
• Advertising ($1.5B+ ARR) and Uber One provide high-margin incremental revenue.

4.3 Balance Sheet

Uber ended FY2025 with $7.0B in cash and $9.8B in total debt, implying net debt of ~$2.8B. The company's strong FCF generation ($9.8B) supports aggressive capital returns and debt reduction. Total equity of ~$28B provides a solid capital base.

5. Valuation

5.1 Comparable Company Analysis

Uber trades at a meaningful discount to DoorDash on EV/EBITDA despite superior scale, diversification, and profitability. The discount reflects Uber's more mature growth profile vs. DoorDash's pure-play delivery premium.

5.2 DCF Valuation

Our DCF model uses a 5-year explicit forecast period (2026E-2030E) with a blended terminal value (50% perpetuity growth, 50% exit multiple). Key assumptions:

• WACC: ~9.2% (risk-free 4.3%, beta 1.15, ERP 5.5%, CRP 0.5%)
• Revenue CAGR (5Y): ~13%
• Terminal EBITDA margin: 22%
• Terminal growth: 3.0% | Exit EV/EBITDA: 20x

5.3 Target Price Derivation

Our 12-month target price of $100 is derived from a blended DCF valuation. This implies an EV/EBITDA of ~14x on FY2027E EBITDA — a discount to the peer median of ~24x, which we believe is unjustified given Uber's superior scale, profitability, and AV optionality. The stock's recent 28% decline from its October 2025 all-time high of $100 presents an attractive entry point.

6. Financial Model Summary

Key projections from our three-statement model:

Key assumptions: Revenue CAGR ~13% (FY2025-2030E), EBITDA margin expanding from 16.7% to 22.0%, capex declining from 3.3% to 2.5% of revenue. Full model in 3-statements.xlsx.

7. Risks

8. Appendices

The following companion files contain detailed supporting analysis:

• Sector Overview: coverage/UBER/01-sector-overview.docx
• Idea Generation & Screening: coverage/UBER/02-idea-generation.docx
• Comparable Company Analysis: coverage/UBER/03-valuation/comps-analysis.xlsx
• DCF Valuation Model: coverage/UBER/03-valuation/dcf-model.xlsx
• Three-Statement Financial Model: coverage/UBER/04-financial-model/3-statements.xlsx
• Thesis Tracker: coverage/UBER/06-thesis-tracker.xlsx
• Catalyst Calendar: coverage/UBER/07-catalyst-calendar.xlsx

Disclaimer

This report has been prepared for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation to purchase or sell any securities. The information contained herein is based on sources believed to be reliable, but no representation or warranty, express or implied, is made as to its accuracy, completeness, or timeliness.

This report does not constitute investment advice. Past performance is not indicative of future results. Investors should conduct their own due diligence and consult with qualified financial professionals before making investment decisions.

The analyst(s) responsible for this report certify that (1) the views expressed herein accurately reflect their personal views about the subject securities and issuers, and (2) no part of their compensation was, is, or will be directly or indirectly related to the specific recommendation or views contained in this report.

Rating definitions: BUY = expected total return >15% over 12 months. OVERWEIGHT = >5%. HOLD = -5% to +5%. UNDERWEIGHT = <-5%. SELL = <-15%.

All data as of 2026-02-28. Sources include company SEC filings, Yahoo Finance, StockAnalysis, Grand View Research, Statista, MacroTrends, and public financial databases.