Is Uber Still Cheap?

May 06, 2026 | Read online

Is Uber Still Cheap?

Gross bookings beat. EBITDA at the top of guidance. $3 billion in buybacks in one quarter.

Hey there, bargain hunter

Uber reported this morning and the stock jumped roughly 8 to 10 percent in premarket trading. Before you assume the trade is over, let’s slow down. Because a 10 percent pop on a stock that was sitting 28 percent below its 52-week high means the market is not exactly declaring victory. It means it exhaled. That’s different.

Here is what actually happened — and more importantly, what it means for the value that may still be sitting on the table.

The Scoreboard

Q1 2026 gross bookings: $53.7 billion — beat the $52.8 billion consensus, up 25% year over year
Q1 2026 revenue: $13.2 billion — slight miss vs. $13.29 billion expected, up 14% YoY
Non-GAAP EPS: $0.72 — beat the $0.70–$0.71 estimate, up 44% year over year
GAAP EPS: $0.13 vs. $0.70 expected — but the gap is entirely explained by a $1.5 billion mark-to-market hit on Didi and Grab equity stakes. Not an operational miss. Not even close.
Adjusted EBITDA: $2.5 billion, up 33% YoY — margin of 4.6% of gross bookings, at or above the high end of guidance
Free cash flow: $2.3 billion | Operating cash flow: $2.4 billion
Share repurchases in Q1 alone: $3.0 billion — more than double the $1.8 billion spent in Q1 2025
Total trips: 3.6 billion, up 20% year over year
Monthly active platform consumers: 199 million, up 17% year over year
Uber One members: 50 million — a milestone reached this quarter
Q2 2026 gross bookings guidance: $56.25 billion to $57.75 billion — above the $56.17 billion consensus
Q2 2026 non-GAAP EPS guidance: $0.78 to $0.82

CEO Dara Khosrowshahi noted the company delivered top line and profitability at or above the high end of guidance — and that was with a backdrop of war, weather disruptions, and gas prices up roughly 50% since U.S. operations in Iran began in February. Macro headwinds were real. The results came in anyway.

What the Market Got Wrong Heading In

The bear thesis coming into today was threefold: fuel costs would bite EBITDA, the new CFO would be cautious on capital return, and the GAAP earnings miss would spook the headline readers. All three were either wrong or irrelevant to the actual business.

Fuel costs are real. Gas prices in the U.S. jumped roughly 50% since February. Uber’s drivers foot their own fuel bills, which tightens supply and pressures driver incentives. Uber responded in late March by rolling out fuel discounts for drivers through nearly the end of May. The margin held anyway — EBITDA as a percentage of gross bookings came in at 4.6%, right where it was in Q4 2025. That is not what a fuel-squeezed quarter looks like.

The $0.13 GAAP EPS number looked alarming against the $0.70 consensus. But the delta was a $1.5 billion non-cash charge from the revaluation of Uber’s equity stakes in Didi and Grab. These are Asian ride-hailing companies whose stock values moved unfavorably. The underlying operating performance was a 44% increase in non-GAAP EPS to $0.72. The GAAP headline confused people. Bargain hunters know to read past the headline.

And the new CFO? Balaji Krishnamurthy stepped in and authorized $3 billion in buybacks in a single quarter. That is not cautious messaging. That is the clearest possible signal on capital allocation confidence.

The Business Is Not What the Stock Price Implied

Uber One just crossed 50 million members. That is the number that does not get enough attention in the post-earnings commentary. Members now drive half of all gross bookings across Mobility and Delivery. Half. On a platform doing $53.7 billion in quarterly bookings, that means roughly $27 billion per quarter is running through a high-frequency, low-churn subscription cohort that spends roughly three times more than non-members. That is not a growth metric. That is a retention and monetization engine compounding quietly while the tape argues about GAAP.

The advertising business crossed a $2 billion annualized run-rate in 2025, up over 50% year over year. Advertising revenue inside the Uber app is structurally different from display inventory. Advertisers are reaching 199 million monthly consumers who are already in motion, already transacting, already intent-verified. That is a rare ad surface, and it is growing faster than the platform itself.

Slight tangent, but it matters: Uber launched in-app hotel booking via an Expedia partnership last week, giving users access to over 700,000 hotels. Vrbo vacation rentals are expected inside the app later in 2026. Ahold Delhaize expanded its Uber Eats partnership on May 4, adding nearly 2,000 grocery stores. These are take-rate expansion vectors, not headline items. Each one is another reason a user opens the Uber app instead of a competitor’s.

The AV Update — And Why 15 Cities Changes the Conversation

Khosrowshahi confirmed on the call that Uber is targeting Waymo services in 15 cities by the end of 2026. Two cities were the entry point. Fifteen is an inflection. The model here is capital-efficient by design — Uber provides the demand routing, the partners provide the vehicles. No capex. Accretive take rates. And Uber is now selling services to the AV industry broadly: custom insurance, operations and maintenance, and driver training data. That is a B2B revenue line that did not exist two years ago.

The AV partnership roster has also expanded. Uber’s three-pillar approach now covers hardware platforms — Rivian, Mercedes-Benz, Volkswagen — plus self-driving technology partners including Waymo, Cruise, and Aurora, plus fleet management solutions. This is not a two-city pilot anymore. It is a platform strategy. Investors who were worried Waymo would disintermediate Uber are watching Uber become the marketplace layer for the entire autonomous vehicle industry. That reframe matters for the multiple.

Is It Still Cheap at $77

After the pop, the stock is trading near $77 to $78. Market cap in the $160 billion range. The stock is still roughly 23 to 25 percent below its 52-week high of $101.99.

Here is the free cash flow math that the market keeps sleeping on. Full-year 2025 free cash flow was $9.8 billion — up 42% year over year. Q1 2026 just produced $2.3 billion in a single quarter, in a macro environment that included a war, a fuel shock, and a CFO transition. Annualize that and you are looking at roughly $9 to $10 billion in FCF against a $160 billion market cap. That is a 5.6% to 6.3% free cash flow yield on a company that is still growing bookings 25% year over year. That combination — growth plus yield — is not something the market prices easily, and it is why the analyst consensus 12-month target still sits north of $100.

The $3 billion buyback in Q1 is worth sitting with. At a $73 average price — roughly where the stock was trading in the quarter — that is approximately 41 million shares retired in 90 days. The share count is shrinking fast. That is the mechanism behind a 44% non-GAAP EPS increase on 33% EBITDA growth. The buyback is amplifying earnings per share materially, and if Q2 guidance of $0.78 to $0.82 non-GAAP EPS comes through, you are looking at a stock trading at less than 25 times a rapidly growing earnings stream.

What’s interesting is the peer comparison here. DoorDash carries a higher EBITDA multiple but is a single-segment domestic business with no membership flywheel and no AV optionality. Lyft trades at a lower multiple but with far less scale, no delivery, and no advertising revenue to speak of. Airbnb is structurally different. Uber is the only company in this group generating institutional FCF, growing bookings 20%-plus, running a 50 million member subscription program, and building a capital-light autonomous vehicle marketplace. The relative discount to peers hasn’t fully closed with this morning’s pop.

What Could Still Go Wrong

The bear case did not disappear this morning. Fuel costs are still elevated — the driver discount program runs through late May, and if pump prices stay elevated into Q2, incentive costs go up. The mobility revenue miss ($6.8 billion actual vs. $7.11 billion expected) was attributed partly to the macro backdrop and partly to Middle East operation impacts. Khosrowshahi noted little consumer impact domestically, but the international exposure is real.

Regulatory risk is quiet right now but not gone. Driver classification fights in Europe are ongoing. A large market reclassification of drivers as employees would restructure the cost base meaningfully. And the AV expansion to 15 cities requires execution — each partnership has its own technical, regulatory, and operational dependencies that Uber does not fully control.

These are real risks. They are also not new. What changed this morning is that the market got confirmation the business can perform through macro stress while returning capital aggressively. That narrows the risk/reward range considerably for a patient buyer.

The Bargain Hunter Scorecard

Gross bookings growth above 20% for third consecutive quarter: Check
EBITDA margin holding at or above 4.5% of gross bookings: Check — 4.6%
Free cash flow conversion above $2 billion per quarter: Check — $2.3 billion
Buyback execution under $7 billion authorization: Check — $3 billion in Q1 alone
Uber One member growth — target 50 million: Check — milestone reached this quarter
Q2 bookings guidance clearing consensus: Check — $56.25B–$57.75B vs. $56.17B consensus
Non-GAAP EPS growth accelerating: Check — up 44% YoY
AV expansion beyond two-city pilot: Check — 15-city target confirmed by end of 2026
GAAP net income growth: Miss — $1.5 billion non-cash mark-to-market hit on Didi/Grab equity. Not operational.
Mobility revenue beat: Miss — $6.8 billion vs. $7.11 billion expected. One to watch in Q2.

Eight out of ten. In a quarter with war, weather disruptions, and a 50% fuel price spike.

Action Plan

The pop has already happened. For the trader who was positioned ahead of the print — this morning was the exit window, or at minimum the trim window, on a short-term position. The stock ran from the low $70s to the high $70s. That is the range clearing. Let it settle.

For the bargain hunter with a 12-to-18 month view, the post-pop range of $76 to $80 is still well inside the value zone relative to the FCF yield, the analyst consensus target, and the earnings growth rate. A scale-in approach — entering a partial position near current levels with a plan to add on any pullback toward $72 to $74 — keeps the cost basis at a level where the thesis has room to breathe. A defined risk below $68, which is the 52-week low, keeps the downside quantified.

The Q2 print is the next real test. Watch mobility revenue specifically — the $6.8 billion actual versus $7.11 billion expected is the one data point the bears will anchor to. If Q2 mobility revenue closes that gap while EBITDA margin holds above 4.5%, the discount to fair value compresses further. The non-GAAP EPS guidance of $0.78 to $0.82 implies the earnings growth rate is accelerating, not plateauing.

Bottom line: the GAAP headline is a noise trade. The operational story is a signal trade. If Uber’s EBITDA margin continues toward 5% of gross bookings, the buyback shrinks the float, and the AV expansion proves accretive at scale — the stock at $77 is still a bargain relative to where the free cash flow math points. The market just stopped pricing it like a 2019 money-loser. That is the beginning of a re-rate, not the end of one.

For informational and educational purposes only. Not investment advice. All investing involves risk, including possible loss of principal.

This content is for informational purposes only and should not be considered financial advice. Investing involves risk.

The Cheap Investor is a publication of Investing Media Solutions, LLC.

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