Uber's Secret Weapon: The Numbers Wall Street Missed

Why a 5–15% Dip Today Could Be Your Best Entry in Months

UBER 0.00%↑’s recent breakout to all-time highs reflects accelerating demand for rides and Eats, narrowing losses, and emerging free-cash-flow positivity. While the stock is overbought in the very short term, disciplined entries on modest pullbacks offer an attractive risk/reward for a 6–18-month horizon.

Key Takeaways

• Fundamentals: Q2 revenue +22% YoY; adjusted EBITDA breakeven target moved to mid-2025; first positive free cash flow.

• Technicals: Closed at $96.68 above the $94.38 high; premarket pullback to $96.39; RSI ~70; bullish MACD; price above all SMAs; breakout confirmed.

• Support Zones: $92.00–93.00 (0.382 Fib), then $89.50–90.50 (0.5 Fib & Ichimoku cloud).

• Targets:

  • T1: $101.50 (2.618 Fib)

  • T2: $105.95–108.68 (3.618–4.236 Fibs)

  • T3: $115–125 (12–18 mo EV/GMV re-rating)

• Plan: Build initial position on dips to $92–93, add at $89–90; trim into strength and trail stops.

1. Fundamental Analysis

Uber’s underlying business is demonstrating both robust growth and improving profitability metrics:

• Revenue Growth
  In Q2 2025, Uber generated $9.0 billion in revenue—up 22% year-over-year from $7.4 billion. Both the Rides and Eats segments contributed double-digit gains, reflecting accelerating consumer demand and successful cross-sell initiatives.

  

• EBITDA Trajectory
  Adjusted EBITDA swung to breakeven in Q2, a $300 million improvement from last year’s $300 million loss. Management now targets sustained EBITDA breakeven by mid-2025, underscoring a clear path to profitability.

• Free Cash Flow Turnaround
  Uber reported its first positive free cash flow of $0.1 billion versus a $0.5 billion cash burn in the prior year. This shift to cash-flow generation is key to funding growth without additional dilution.

• Balance-Sheet Deleveraging
  Net debt fell by $0.7 billion to $6.5 billion, thanks to stronger cash flow and prudent capital allocation. Reduced leverage provides financial flexibility for strategic investments and shareholder returns.

• Gross Bookings Leverage
  Gross Bookings (GMV) rose 25% year-over-year to $30 billion. An uptick in take-rate lifted GMV leverage, driving higher margin dollars per transaction.

• 2025 Guidance Upgrade
  Management raised full-year 2025 revenue guidance by 5%, signaling confidence in summer travel trends and continued Eats rollout.

Bullish Factors:

• A credible roadmap to EBITDA and free-cash-flow positivity.

• Global scale with strong network effects across Rides, Eats, and Freight.

• Emerging high-margin initiatives like autonomous delivery.

Bearish Risks:

• Tightening regulations around driver classification could raise costs.

• Intensifying competition from Lyft, DoorDash, and regional players.

• The stock trades at approximately 5.5× forward EV/GMV, above its historical 4.0× average.

Fundamental Verdict:
Uber’s combination of high-teens revenue growth, imminent profitability, and early-stage cash-flow generation supports a medium-term constructive outlook. The premium valuation is justified by the company’s improving margin profile, but disciplined entry points on modest pullbacks are recommended to optimize risk/reward.

2. Technical Analysis

2.1 Daily Chart

• Breakout: Closed above $94.38 (prior high) at $96.68 on expanding volume; premarket pullback to $96.39.

• Fibonacci Extension (from $89.99 low → $97.12 high):

  • 1.618 → $97.11 (tested)

  • 2.618 → $101.53

  • 3.618 → $105.95

  • 4.236 → $108.68

• Retracement Levels:

  • 0.382 → $91.60

  • 0.5 → $89.50

• Momentum:

  • RSI ~70 (overbought threshold) but no bearish divergence.

  • MACD histogram positive, signal line above zero.

• Trend: Price > 50/100/200 SMAs (all rising).

• Ichimoku: Tenkan/Kijun bullish cross; cloud support ~89.50.

Technical Takeaway: Strong bullish structure. A 3–5% pullback into $92–93 aligns with 0.382 Fib for optimal entries; deeper tests to $89–90 remain buying zones.

3. Our Investment Plan

1. Initial Entry (30–40% of target size)

   • Zone: $92.00 – $93.00

   • Stop: $89.00

2. Secondary Add (30%)

   • Zone: $89.50 – $90.50

3. Final Build (30–40%)

   • On any further pullback toward 50 SMA (~$88.60) or consolidation.

4. Profit-Taking & Stops

   • T1: $101.50 – lock in ~30%

   • T2: $105.95 – $108.68 – lock another ~30%

   • T3: $115 – $125 – hold remainder with a trailing stop.

   • Stop-Loss: initially $89; trail to breakeven after T1; then a 15–20% trailing stop.

4. Risk & Catalysts

• Upside Catalysts: Summer travel surge; Eats Plus subscription roll-out; autonomous delivery and Freight tooling gains.

• Downside Risks: Adverse driver-classification rulings; intensifying competition (Lyft, DoorDash, Grab); valuation at ~5.5× forward EV/GMV could compress on any growth hiccup.

Bottom Line

Uber’s sustainable revenue growth, imminent profitability, and free cash flow generation justify a premium rating. Technically, the breakout past $94.38 aligns with momentum indicators, yet short-term overbought readings warrant waiting for a retracement into the low-90s. For a 6–18-month hold, building on dips to $92–93 (with adds toward $89–90) captures the best risk/reward on targets spanning $101.50 to $108.68, and ultimately $115–125 as the narrative shifts from growth to cash-flow monetization.

Discipline in entry zones and trimming into strength will maximize returns while protecting capital.