Uber Technologies UBER released its third-quarter earnings report on Nov. 4. Here’s Morningstar’s take on Uber’s earnings and stock.

Key Morningstar metrics for Uber Technologies

  • Fair Value Estimate: $93.00
  • Morningstar Rating: ★★★
  • Morningstar Economic Moat Rating: Narrow
  • Morningstar Uncertainty Rating: Very High

What we thought of Uber Technologies’ Q3 earnings

Uber’s third-quarter earnings exceeded management’s forecast for 20% growth in bookings. The firm estimates similar growth for the next quarter and only a 100-basis-point increase in adjusted operating margin, which we suspect is the primary reason for the shares selling off.

Why it matters: Despite what we see as an uneven economic recovery, where lower-end consumers have poor sentiment, Uber is capturing demand with low-cost formats, strengthening its network effect. Autonomous vehicles, or AVs, remain an open capital expenditure question, however.

  • An asset-light business model has always been the goal, but it’s no longer a certainty given ambiguity over which player in the AV value chain will assume vehicle ownership. Uber believes private equity will step up, but we think this is an outcome management wishes for rather than expects.
  • Monthly active platform consumers, trips, and trip frequency—all metrics we use to quantify network effects—are at all-time highs and accelerating. We are typically cautious about substituting price for volume, but we believe affordability investments are strengthening Uber’s offering.

The bottom line: We maintain our narrow moat rating while raising our fair value estimate from $90 to $93, reflecting a declining insurance cost curve due to the recent legislative victory in California and balancing this with our view that Tesla’s Robotaxis pose a significant disruptive threat.

  • After a recent partnership announcement with Toast—where Uber becomes a preferred delivery and advertising platform to Toast restaurants—we believe the runway for food delivery growth and margins is now clearer than ridehailing growth, considering AV competition in the latter.
  • Operating performance, free cash flow, and network effects are all strong; however, the company is only fairly valued, given AV risks. Should more AV companies, besides Waymo and Tesla, emerge, those risks will diminish, as Uber could then benefit from more profitable partnerships.

Fair Value Estimate for Uber Technologies

With its 3-star rating, we believe Uber’s stock is fairly valued compared with our long-term fair value estimate of $93 per share, which represents an enterprise value of 3.6 times our 2025 revenue estimate. We project that Uber’s revenue over the next five years will grow 14% annually on average, consistent with our understanding of the nascent but maturing ridehailing market.

Economic Moat Rating

Uber operates as a dynamic marketplace that we believe warrants a narrow moat rating based primarily on network effects. While other rivals also enjoy network effects, none have Uber’s scale, which provides Uber with a cost advantage in which fixed costs are spread across more trips.

The firm also fosters unmatched engagement, which provides an intangible asset in the form of user data. This data contributes to virtuous cycles wherein increased trips lead to more data, which leads to improved application performance, which leads to more trips. The strength of Uber’s network effect is the critical determinant of its ability to maintain returns above its cost of capital.

Financial strength

As of September 2025, Uber had approximately $8.5 billion of cash and $10.6 billion of debt on its balance sheet. The debt obligations include a mix of senior unsecured notes, convertible notes, and refinanced term loans with staggered maturities extending as far as 2054. There is a total of $2.9 billion in convertible debt that carries a low average rate of 0.74%. $1.15 billion of the convertible debt is due in 2025. The conversion rate is 12.37 shares per $1,000 in principal amount of notes, equivalent to a conversion price of $80.84 per share of common stock.

We believe the rate profile reflects appropriate terms that balance Uber’s cost of capital with shareholder dilution risks. In the second quarter of 2025, Uber authorized up to $20 billion in share repurchases to offset dilution.

Risk and Uncertainty

We assign Uber a Very High Uncertainty Rating. The main uncertainty and cause of near-term volatility is the potential impact of autonomous vehicles, or AVs, on the ridehailing industry.

UBER bulls say

  • Uber’s role as the premier ridehailing and delivery demand aggregator positions it as the perfect partner for autonomous vehicle companies looking to scale AV fleets and achieve high utilization rates.
  • Strong core user base growth reinforces Uber’s network effect, generating a virtuous cycle where more riders on the platform encourage more drivers to join the platform and vice versa.
  • Uber’s large userbase provides rich data for further improvement to supply demand matching algorithms, enhancing its proprietary fleet management software and value proposition to AV companies.

UBER bears say

  • AV companies have a superior cost structure because they don’t need to pay drivers. They will develop exclusive applications and effectively cut Uber out of the entire market.
  • Uber’s value proposition to AV companies is fragile and concentrated on lower-margin fleet management services like charging and cleaning.
  • Ridehailing is still a relatively new industry, which leaves plenty of room for increasing regulations. The mandatory classification of gig workers as full-time employees could compress margins and hurt the company.

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Terms used in this article

Star Rating: Our one- to five-star ratings are guideposts to a broad audience and individuals must consider their own specific investment goals, risk tolerance, and several other factors. A five-star rating means our analysts think the current market price likely represents an excessively pessimistic outlook and that beyond fair risk-adjusted returns are likely over a long timeframe. A one-star rating means our analysts think the market is pricing in an excessively optimistic outlook, limiting upside potential and leaving the investor exposed to capital loss.

Fair Value: Morningstar’s Fair Value estimate results from a detailed projection of a company’s future cash flows, resulting from our analysts’ independent primary research. Price To Fair Value measures the current market price against estimated Fair Value. If a company’s stock trades at $100 and our analysts believe it is worth $200, the price to fair value ratio would be 0.5. A Price to Fair Value over 1 suggests the share is overvalued.

Moat Rating: An economic moat is a structural feature that allows a firm to sustain excess profits over a long period. Companies with a narrow moat are those we believe are more likely than not to sustain excess returns for at least a decade. For wide-moat companies, we have high confidence that excess returns will persist for 10 years and are likely to persist at least 20 years. To learn about finding different sources of moat, read this article by Mark LaMonica.