UBER after the drop: One of the best opportunities on the market? I'm buying
Uber $UBER is currently one of the companies I'm most interested in on the market.
The stock is trading around $70–72, well below its highs, and sentiment around the company is under pressure mainly because of one thing:
robotaxis.
The market fears that Tesla, Waymo and other players will gradually remove the driver and with it perhaps also the need for Uber.
The more I look into the whole situation, however, the more I think the market may be asking the wrong question.
In my opinion, the question isn't:
"Will robotaxis destroy Uber?"
But rather:
"Who will own the customer and the demand layer when robotaxis scale massively?"
And that's exactly where Uber may have a huge advantage.
The business isn't falling apart at all
The latest quarter was again very strong.
In Q2, Uber delivered:
📈 Gross Bookings +22% YoY at constant currency
🚗 Trips +18%
💰 GAAP operating income +30%
🚀 Non-GAAP operating income +40%
📊 Non-GAAP EPS +35%
💵 TTM free cash flow above $10 billion for the first time
Uber already serves more than 200 million monthly users.
These aren't the numbers of a company whose business someone is destroying.
Quite the opposite.
Top-line still grows at a double-digit pace, but profit and cash flow grow even faster.
That's exactly what I want to see in a company.
Operating leverage.
Uber One may be far more important than it seems
Another thing I think the market somewhat underestimates is Uber One.
CEO Dara Khosrowshahi said at the Goldman Sachs conference that Uber One already has more than 50 million members, membership is growing roughly 50% year-over-year, and members generate about half of Uber's Gross Bookings.
I really like that.
Uber is no longer just:
open the app → order a car → done.
It's gradually becoming an ecosystem.
Mobility.
Delivery.
Membership.
Autonomous vehicles.
And the more services a person uses, the more value the whole platform has.
That can increase usage frequency, retention and customer lifetime value.
And what about robotaxis?
This is, in my view, the most interesting part of the whole investment thesis.
Tesla may have its own autonomous technology.
Waymo may have its own autonomous technology.
WeRide may have another.
Baidu yet another.
But Uber doesn't have to know how to build the best autonomous car.
Uber wants to be the platform through which those cars are ordered.
It already partners with more than 30 AV partners, and autonomous vehicles on its platform complete millions of rides annually. Uber targets AV rides in up to 15 cities by the end of 2026.
At the same time, Uber plans to invest more than $10 billion in the coming years into investments, infrastructure and commitments related to autonomous vehicles.
And here the thesis starts to get interesting.
Imagine a robotaxi manufacturer.
It may have a great car.
But it still needs:
customers,
an app,
payments,
pricing,
dispatch,
support,
charging,
fleet management,
insurance,
regulation,
and above all enough demand throughout the day.
Uber has been building this for more than a decade.
And moreover, it can combine human drivers + autonomous vehicles depending on current demand.
For a robotaxi company, it may ultimately be far more economically sensible to plug its vehicles into Uber's network than to build its own global marketplace from scratch.
That's the bet I think Uber is making today.
Management is buying with their own money
And now comes the thing that caught my attention even more.
On September 10, CEO Dara Khosrowshahi bought on the open market:
141,000 UBER shares
at an average price of about
$70.96.
That represents an investment of about $10 million.
So practically at the prices at which we can buy Uber today.
And he wasn't the only one.
President and COO Andrew Macdonald bought another 70,000 shares at around $76, so more than $5 million.
Insider buying of course doesn't automatically mean the stock will go up.
But the difference between:
"the CEO received shares as compensation"
and
"the CEO pulled out about $10 million and voluntarily bought shares on the market"
is, in my view, quite significant.
If management saw an imminent collapse of the business model due to autonomous vehicles, that would be at least odd timing.
And then there's Pelosi
This is also an interesting detail, though I give it significantly less weight than insider buying.
In congressional disclosure, Nancy Pelosi reported a transaction by her husband Paul Pelosi:
200 UBER call options
strike $50
expiration March 19, 2027
disclosed value $500,001 to $1 million.
So it was a fairly significant bullish position through longer-term deep-in-the-money calls.
Interesting?
Yes.
A reason to buy?
No.
I'm far more interested in what Uber's own management is doing.
And valuation?
This is where the whole thing starts to make the most sense to me.
At a price of about $72, Uber has a market cap of about $146 billion.
TTM FCF has already exceeded $10 billion.
So at first glance we get roughly:
14–15× TTM FCF
for a company whose Gross Bookings are growing over 20%, EPS is growing about 35%, and there is still huge room for further operating leverage.
However, we have to be fair here.
Uber's FCF isn't entirely "clean" $10 billion that I would capitalize at 20× without thinking. Stock-based compensation and movements in insurance reserves need to be normalized in valuation.
But even with a more conservative view, today's price doesn't seem expensive to me given the quality and growth of the company.
Why I'm buying
With Uber today, I think I'm getting a very interesting combination:
a quality and growing business
●
significant operating leverage
●
growing free cash flow
●
buybacks
●
strong network effect
●
Uber One ecosystem
●
huge AV optionality
●
a valuation compressed by robotaxi fear.
And that's exactly the kind of situation I look for.
I don't want to buy a bad company just because it's cheap.
I want to buy a quality company at a price at which the market, in my view, over-discounts one specific risk.
Of course, I may be wrong.
Tesla might build a huge closed robotaxi network.
Waymo might get much stronger.
Uber might spend billions on an AV strategy without adequate returns.
That risk is real.
But at today's valuation, the risk/reward seems very attractive to me.
That's why I will continue building my position in $UBER in the near future.
And at prices around $70, I currently consider it one of the most interesting opportunities I see on the market.
Not because robotaxis won't come.
But perhaps precisely because they will — and the market still doesn't know whether they'll be a threat to Uber or one of its biggest future catalysts.