Uber Technologies (UBER) is set to announce its fourth-quarter earnings before the market opens on Wednesday. Analysts expect the company to report year-over-year revenue growth, though a decline in profit is anticipated.
All 25 analysts tracked by Visible Alpha have a “buy” rating on Uber’s stock, reflecting strong confidence in the company. The stock has a consensus price target of $90.50, which represents a 35% upside from its closing price on Friday.
Revenue for the quarter is projected to increase by approximately 18% year-over-year, reaching $11.76 billion. However, net income is expected to decrease by 27%, falling to $1.04 billion. This decline is attributed to a one-time $1 billion net gain Uber recognized in Q4 2023 from the revaluation of its equity investments.
Analysts Say Autonomous Vehicle Concerns Held Back Stock
Bank of America analysts suggested in a recent note that concerns surrounding autonomous vehicles, which negatively impacted Uber’s stock last year, may be overstated. Despite the stock ending 2025 down 2%, analysts believe that 2025 will offer clearer insights into the extended timeline for the rollout and public adoption of autonomous vehicles (AVs), potentially creating both opportunities and risks for Uber.
Uber, along with its competitor Lyft, has entered into partnerships with several AV and technology companies, including Alphabet’s Waymo and Nvidia, to advance the development of autonomous vehicles. However, both companies also face growing competition from Tesla, which has announced plans to deploy its AVs in select markets this year.
As Uber Technologies (UBER) prepares to report its fourth-quarter earnings this week, analysts are offering a mixed but generally optimistic outlook on the rideshare giant’s stock. The company is expected to show strong revenue growth but a decline in profits, driven by last year’s one-time benefit from a revaluation of its equity investments. Despite this, Wall Street remains bullish on Uber, with analysts predicting that 2025 could bring greater visibility and growth opportunities.
Revenue Growth, Profit Decline Expected
According to estimates from Visible Alpha, Uber is expected to report an 18% year-over-year increase in revenue for Q4, totaling approximately $11.76 billion. While the company has continued to see strong demand for its ridesharing services, analysts are forecasting a 27% decline in net income, which is projected to fall to $1.04 billion. This decline is largely attributed to a $1 billion net benefit Uber recorded in Q4 2023, related to the revaluation of its equity investments.
Despite the anticipated drop in profit, analysts remain optimistic about the company’s overall performance. All 25 analysts tracked by Visible Alpha have maintained a “buy” rating on Uber’s stock, with an average price target of $90.50—indicating a potential upside of 35% from its Friday closing price.
The Autonomous Vehicle Debate
One of the key concerns affecting Uber’s stock over the past year has been the development of autonomous vehicles (AVs), which some investors fear could disrupt the business model of ridesharing companies. However, analysts from Bank of America believe that these concerns have been “overdone.” In a note released earlier this week, they noted that while Uber’s stock ended 2024 down 2%, they expect 2025 to provide more clarity on the timeline for the rollout and public adoption of AVs, which could present both risks and opportunities for the company.
Uber, along with its main competitor Lyft (LYFT), has signed multiple partnerships with AV and technology companies, including Alphabet’s Waymo and Nvidia, to advance the development of autonomous vehicles. However, the two ridesharing companies face competition from Tesla (TSLA), which has expressed plans to deploy its own AVs in select markets this year. This growing competition in the AV space is something investors will be closely watching in the coming months.
Frequently Asked Questions
What is Uber expected to report for Q4 earnings?
Analysts expect Uber to report an 18% year-over-year increase in revenue for the fourth quarter, totaling approximately $11.76 billion. However, its net income is projected to decline by 27%, falling to $1.04 billion, largely due to a one-time $1 billion benefit Uber recognized in Q4 2023 from the revaluation of its equity investments.
What are analysts’ general views on Uber stock?
Analysts are generally optimistic about Uber’s stock. All 25 analysts tracked by Visible Alpha have rated the stock a “buy.” The average price target for Uber’s stock is $90.50, which represents a potential upside of 35% from its most recent closing price.
Why is Uber’s profit expected to decline?
Uber’s projected decline in profit is primarily due to a one-time $1 billion net benefit the company recognized in Q4 2023 from the revaluation of its equity investments. Without this benefit, Uber’s earnings would have been lower year-over-year.
What concerns have analysts raised regarding Uber’s future?
One of the key concerns for Uber in the past year has been the potential impact of autonomous vehicles (AVs) on its business model. Some investors fear that widespread adoption of AVs could reduce the need for human drivers, affecting Uber’s core business. However, analysts at Bank of America believe these concerns are “overdone” and expect clearer visibility into the timeline for AV adoption in 2025.
How does Uber compare to its competitors like Lyft and Tesla in the AV space?
Uber and Lyft have both signed partnerships with several AV and tech companies, including Alphabet’s Waymo and Nvidia, to develop autonomous vehicle technology. However, both companies also face increasing competition from Tesla, which has announced plans to deploy its own AVs in certain markets in 2025. This growing competition in the autonomous vehicle space is something analysts are closely monitoring.
How has Uber’s stock performed recently?
Uber’s stock gained about 11% in January, indicating renewed investor confidence. However, it has been relatively flat over the past 12 months, ending 2024 with a slight decline of 2%. Despite this, analysts remain bullish on the stock due to its strong revenue growth prospects and future opportunities in the AV market.
What should investors expect from Uber in 2025?
Investors are hopeful that 2025 will provide more clarity on the long-term trajectory of autonomous vehicle technology and how it will impact Uber’s business. Analysts expect that the rollout and public adoption of AVs will become clearer, creating new growth opportunities for Uber. However, there may also be risks related to the competition in the autonomous vehicle market.
How do analysts view Uber’s future earnings growth?
Analysts remain positive about Uber’s future earnings potential, particularly as the company continues to expand its services and develop new revenue streams. Uber’s diversification into areas such as food delivery (Uber Eats) and freight logistics, along with its continued focus on improving its ridesharing platform, positions it well for sustained growth.
Conclusion
Analysts are largely optimistic about Uber’s stock ahead of its fourth-quarter earnings report. While the company is expected to report strong year-over-year revenue growth, a decline in profits is anticipated due to a one-time gain from the revaluation of its equity investments in the prior year. Despite this, analysts maintain a positive outlook, with all 25 analysts tracked by Visible Alpha rating the stock a “buy” and setting an average price target that suggests significant upside potential.
The ongoing concerns surrounding the impact of autonomous vehicles on Uber’s business model appear to be overstated, according to some analysts, who expect 2025 to bring more clarity on the adoption timeline for autonomous vehicles. As Uber continues to make strategic partnerships in the AV space and diversifies its services, including food delivery and freight, analysts see potential for sustained growth.
