Here’s the growth forecast for Uber stock through to 2027!

Uber shares just rocketed to a record high after Tesla’s robotaxi event. Ben McPoland takes a look at the forecasts for this red-hot growth stock.

| More on:

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Uber Technologies‘ (NYSE: UBER) shares soared nearly 11% to $86 on 11 October. This means the growth stock‘s now at an all-time high, having risen 250% since the start of 2023.

Thankfully, I scooped up a load of shares a few weeks ago. In fact, I made Uber one of my top holdings, which is rare because I normally prefer to let stocks ‘earn’ their position over time.

Here’s a look at Wall Street’s growth projections and why I’m so bullish on the ridesharing giant.

Why is Uber flying?

Last week, Tesla (NASDAQ: TSLA) had its robotaxi event, during which it unveiled prototypes of its long-awaited autonomous vehicles (AVs). However, Wall Street wasn’t impressed with the event and Tesla stock dropped nearly 9% on the same day that Uber rallied hard.

This was because Tesla CEO Elon Musk said he expects production of these AVs to begin “probably in 2026“. Given the extensive testing needed for regulatory approval, along with Musk’s track record of overly optimistic timelines, most analysts don’t see them driving about anytime soon. Perhaps as much as five years away!

That’s good news for Uber, as this competitive threat has been lurking. To be clear, a driverless taxi service from Tesla (that includes owners adding their vehicles to the fleet) is still a risk. But it’s one that’s now receded further into the future.

A uniquely well-positioned platform

Personally, I have doubts that many Tesla drivers will want to rent their cars out. As Uber CEO Dara Khosrowshahi said: “It’s also not clear to me that the average Tesla owner… is going to want to have that car be ridden in by a complete stranger.”

Meanwhile, Uber’s positioning itself to be the global platform where most self-driving taxis are booked. It’s partnered with all the big AV players, including industry leader Waymo (owned by Alphabet).

Back in August, Waymo said it was already achieving 100,000 paid trips a week. So this puts to bed the notion that consumers will be too scared to ride in fully autonomous taxis. I’m excited to test one in future!

More recently, Waymo announced it would offer trips exclusively via the Uber app in Atlanta and Austin in early 2025. It’s already partnered with Uber in Phoenix.

Following the Tesla robotaxi event, Jefferies analyst John Colantuoni commented: “We believe AV developers will ultimately choose to partner with rideshare players instead of pursuing standalone fleets. We also see Uber uniquely well-positioned in the rideshare space to help AV developers“.

Source: Waymo

Growth to continue?

Last year, Uber reported its first ever profit. It made $1.1bn on revenue of $37.3bn, versus a loss of $1.8bn the year before.

Revenue surged 17% to $10.7bn in Q2, and Wall Street sees profitable growth continuing through to 2027.

YearRevenue forecastEarnings per share (EPS) 
2024$43.4bn$1.08
2025$50.2bn$2.28
2026$58.2bn$3.13
2027$64.1bn$3.75
Data from TradingView

Of course, the firm could exceed or miss these estimates. But based on the numbers, it means the stock’s trading at 37.7 times forward earnings, falling to 23 for 2027.

While that’s not cheap, Uber’s a global leader in a massive market. Longer term, robotaxis could significantly expand its total addressable market by increasing supply and lowering fares, helping drive even more trips through its app.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Ben McPoland has positions in Uber Technologies. The Motley Fool UK has recommended Alphabet, Tesla, and Uber Technologies. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

How I’d use an empty Stocks and Shares ISA to aim for a £1,000 monthly passive income

Here's how using a Stocks and Shares ISA really could help those of us who plan to invest for an…

Read more »

Investing Articles

This FTSE stock is up 20% and set for its best day ever! Time to buy?

This Fool takes a look at the half-year results from Burberry (LON:BRBY) to see if the struggling FTSE stock might…

Read more »

Investing Articles

This latest FTSE 100 dip could be an unmissable opportunity to pick up cut-price stocks

The FTSE 100 has pulled back with the government’s policy choices creating some negative sentiment. But this gives us a…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

As the WH Smith share price falls 4% on annual results, is it still worth considering?

WH Smith took a hit after this morning’s results left shareholders unimpressed. With the share price down 4%, Mark Hartley…

Read more »

Investing Articles

The Aviva share price just jumped 4.5% but still yields 7.02%! Time to buy?

A positive set of results has put fresh life into the Aviva share price. Harvey Jones says it offers bags…

Read more »

Investing Articles

Can a €500m buyback kickstart the Vodafone share price?

The Vodafone share price has been a loser for investors in recent years, and the dividend has been cut. We…

Read more »

Frustrated young white male looking disconsolate while sat on his sofa holding a beer
Growth Shares

3 mistakes I now avoid when choosing which growth stocks to buy

Jon Smith runs through some of the lessons he's learnt the hard way over the years about what to look…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Should I follow Warren Buffett and sell my favourite shares?

Billionaire US investor Warren Buffett has been selling tons of Apple shares and other stocks of businesses he thinks are…

Read more »