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SUMMARY
Parkev Tatevosian, CFA, analyzes Uber's 2026 stock decline, focusing on competitive threats from driverless car technology and recent strategic moves. He discusses Uber's acquisition efforts, partnerships, and valuation, emphasizing a cautious yet optimistic investment outlook.
MAIN POINTS
- Uber shares have fallen over 13% year-to-date in 2026, largely due to concerns about driverless car technology.
- Uber has increased its stake in Delivery Hero to over 36.8% and is considering a full acquisition to strengthen its food delivery business.
- Uber signed a deal with Rivian to supply up to 50,000 electric vehicles for its robo-taxi fleet, valued at approximately $1.25 billion.
- Tesla's repeated over-promising on driverless vehicle costs and production is contrasted with Uber's competitive position and customer base.
- Uber is trading at low valuations, with a forward P/E of 19.3 and a calculated intrinsic value of $124 per share versus a market price of $71.
- Despite his bullish view on Uber and skepticism toward Tesla, the analyst advocates for portfolio diversification rather than over-concentration in Uber stock.
DETAILED ANALYSIS
Uber's stock performance in 2026 has been notably weak, with a decline exceeding 13% year-to-date, primarily attributed to investor anxiety over the potential disruption posed by driverless car technology. This concern is particularly acute regarding Tesla's ambitions in autonomous vehicles, which many believe could threaten Uber's core ride-sharing business. Despite these fears, Uber has taken strategic steps to strengthen its competitive position.
A significant move is its increased stake in Delivery Hero to over 36.8%, with ongoing negotiations for a full acquisition valued at approximately $11.6 billion. This acquisition is seen as favorable because it could reduce competition and create operational synergies, especially in the food delivery segment, which is less vulnerable to driverless technology compared to ride-sharing.
In addition to acquisition activity, Uber has entered into a partnership with Rivian to supply up to 50,000 electric vehicles for its planned robo-taxi fleet, at a deal value of about $1.25 billion. This arrangement positions Uber to compete directly with Tesla in the autonomous vehicle space, potentially securing vehicles at a cost similar to or only moderately higher than Tesla's projected manufacturing costs. The analyst expresses skepticism about Tesla's ability to deliver on its $25,000 per vehicle promise, citing a history of over-promising and under-delivering, and estimates a more realistic cost in the $30,000 to $33,000 range.
Despite market pessimism, Uber's current valuation metrics suggest a significant disconnect between price and intrinsic value. With a forward price-to-earnings ratio of 19.3 and a price-to-operating cash flow of 12.8, Uber appears undervalued, especially when compared to an intrinsic value estimate of $124 per share versus a market price of $71. The analyst maintains a bullish outlook on Uber, rating it among the top 15 stocks to buy, but cautions against over-concentration, advocating for portfolio diversification to manage risk in light of industry uncertainties and the potential for unforeseen developments.
LINKS
- YouTube channel membership for exclusive perks and early access.
- Motley Fool special offer for stock recommendations.
- Link to Parkev Tatevosian's book on stock investing.
- Fiscal.ai investment research platform with a viewer discount.
- Webull investing platform with bonus shares offer.
- Substack newsletter subscription for monthly updates.