Is Uber’s Autonomous Vehicle Strategy a Game Changer for Investors?

Uber (NYSE: UBER) is making significant strides in two key areas that investors should closely watch: its autonomous vehicle (AV) partnership with Waymo and its growing ambition to challenge Amazon in the retail logistics space.

Uber has partnered with Waymo to integrate Waymo's world-leading autonomous driving technology into Uber’s ride-hailing and delivery networks. Apparently, the public likes this development: Check out UBER’s 1-month chart…

Chart courtesy TradingView

Initially rolling out in Phoenix, this collaboration allows Waymo to scale its AV fleet by leveraging Uber’s vast user base — without requiring Uber to make costly capital investments in self-driving technology. 

For its part, Waymo seems satisfied — as the “trial partnership” will expand to Austin and Atlanta in 2025.

💡Related reading: How to Buy Waymo Stock (the company’s not public, but we found a way!)

Analysts like Josh Beck of Raymond James (a top 3% analyst) see this as a major advantage for Uber, suggesting that turning the once-rivalry into a partnership will soon shift the perception of AVs from being a risk to being a strong growth catalyst for Uber.

Wall Street’s top analysts give the stock a consensus Strong Buy rating — to be more precise, of the 20 analysts tracking the stock, 12 deem it a Strong Buy, and 8 rate it a Buy — with zero Hold, Sell, or Strong Sell ratings.

In fact, the average price forecast looking at 12 months from now lines up almost exactly with Josh Beck’s $90 price target.

Uber isn’t just focused on passenger transport, however. It’s expanding aggressively into the retail logistics market. With UberFreight and UberRush, Uber has become a key player in last-mile delivery, offering both affordability and speed. 

While it’s unlikely that the company will pose a strategic threat to Amazon any time soon (which they, admittedly, do like to boast about) if we’re being realistic about things, this could still potentially end up being a valuable source of revenue for the ridesharing trailblazer.

In addition to its strategic moves in these two areas, Uber has finally turned a corner in profitability. The company's profit margin increased by 6.1% over the past year, from -1.1% to 5%. 

Taking a closer look at the last earnings report reveals that Uber is meeting its goals in terms of userbase, with the mobility division being basically in line with predictions, while the delivery segment is slightly better than expected.

At the same time, Uber’s revenue has grown at an impressive rate of 28.7% annually, outpacing the U.S. market average of 15.06%. The company’s earnings are projected to rise by a staggering 45.99% per year, far exceeding the industry growth forecast of 19.49%, as well as the broader U.S. market average of 17.73%.

Looking forward, Uber's revenue is expected to grow at a strong pace of 13.64% per year, significantly higher than the U.S. market average of 9.39%. Additionally, analysts expect Uber’s Return on Equity (ROE) to soar to 59.88% within four years, showcasing the company’s ability to efficiently generate returns for investors.

There’s one last thing to mention — the company’s next earnings call will be on November 5th, so mark the date down in your calendar — or simply add the stock to your watchlist for convenience.

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