Uber Technologies: The Next Member of the Magnificent 7?

Uber Technologies (UBER) is quickly becoming one of the most compelling stories in the market, and I say that as someone who once believed the company was destined to fail. But Uber has done something truly impressive: transformed itself from a cash-burning operation into a cash-generating machine.What’s even more impressive is that this financial turnaround comes just as massive tailwinds, such as the rise of autonomous vehicles, begin to accelerate. Uber is now integrating robotaxis from partners like Alphabet’s (GOOGL) Waymo and China’s WeRide (WRD) into its platform, positioning itself at the forefront of the self-driving revolution.This morning, Uber reported Q1 2025 earnings that underscore this transformation. Revenue rose 14% year-over-year to $11.5 billion, while net income surged to $1.8 billion, a dramatic reversal from a $654 million loss a year ago. Gross bookings climbed 14% to $42.8 billion, and adjusted EBITDA grew 35% to $1.9 billion. Uber also generated an impressive $2.3 billion in free cash flow during the quarter.Despite the strong report, the stock initially fell as gross bookings came in just shy of expectations. However, buyers stepped in quickly. After trading down more than 6% in early action, shares have narrowed losses to less than 2% as of this writing.Uber has already been outperforming the broader market this year, but given its improving fundamentals, expanding platform, and still-reasonable valuation, I believe the runway for gains is only just beginning.Image Source: Zacks Investment ResearchUber’s Ascent to Super-AppUber’s app has become deeply embedded in our daily lives, reaching the ultimate milestone for a tech company: it’s become a verb. Just as we “Google” information, we now “Uber” to dinner, to work, or to visit family.But Uber’s evolution doesn’t stop at ride-hailing. With seamless integration of Uber Eats, grocery delivery, freight logistics, and now autonomous vehicles, the company is positioning itself as a true super-app.Uber Technologies has entered a new phase, one where it can realistically be compared to the Magnificent Seven. It enjoys many of the same characteristics: monopoly-like platform dominance, accelerating free cash flow, and exposure to secular trends like autonomous driving.With its expanding ecosystem, growing margins, and ability to scale across industries, Uber has become a piece of infrastructure.Uber Technologies Shares Trade at a Historical DiscountDespite its impressive transformation and accelerating financial performance, Uber shares still trade at a discount relative to their historical valuation. Currently, Uber trades at 34.2x forward earnings, well below its post-IPO median of 72.4x. Given projected earnings per share growth of 36% annually, this gives Uber a PEG ratio below 1, a discount based on the metric.Uber currently holds a Zacks Rank #3 (Hold), reflecting a neutral earnings revisions trend. However, with the company consistently outperforming expectations, crushing earnings estimates by an average of 210% over the last four quarters, it's entirely possible that analysts begin revising their outlook upward in the coming weeks.Image Source: Zacks Investment ResearchUBER Stock is one of the Verge of a Massive BreakoutAfter several years of sideways trading, Uber’s stock is showing clear signs of a major shift. Shares are up over 40% year-to-date, demonstrating impressive relative strength in what has been a highly volatile market. Now that Uber is generating substantial free cash flow, it’s becoming a far more attractive investment, and institutional money appears to be taking notice.Technically, the chart tells a compelling story. Over the past year, UBER has formed a large, broad consolidation pattern. It recently broke above key resistance at $80, which I view as a meaningful breakout signal. For those still skeptical, a move above the previous all-time high near $87 would likely confirm the breakout and attract even more buying interest.Image Source: TradingViewShould investors Buy Shares in UBER?Uber has transformed from a cash-burning disruptor into a highly profitable, fast-growing tech platform. With strong earnings growth, rising free cash flow, and new momentum from autonomous vehicle partnerships, the business is firing on all cylinders.Despite this, the stock still trades at a discount to its historical valuation. With a recent breakout on the chart and improving fundamentals, Uber looks like a smart long-term buy, and a real contender to join the ranks of tech’s elite.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alphabet Inc. (GOOGL): Free Stock Analysis Report WeRide Inc. (WRD): Free Stock Analysis Report Uber Technologies, Inc. (UBER): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks