Uber stock closed lower Thursday, giving back some gains from earlier in the week as it tries to rebuild momentum following a recent slide. An analyst with Oppenheimer says the ride-hail market leader's recent sell-off presents an opportunity for investors.
Uber stock has slumped more than 20% since its third quarter earnings report on Halloween day. Oppenheimer analyst Jason Helfstein said in a client note Thursday that the sell-off has been driven by concerns that robotaxi services will challenge Uber's market, along with more near-term questions about rides demand in the U.S. after Q3 total bookings missed estimates.
But Helfstein reiterated an outperform call on Uber with the note and named the company his top large-cap pick for 2025. He said he sees a "buying opportunity" following the recent slide.
"Near term, Uber should retake lost U.S. mobility share upon grandfathering higher insurance costs one quarter before Lyft and more aggressive incentives," Helfstein wrote. "Longer term, Uber will benefit in a world of multiple robotaxi providers, as the leading matching/logistics platform, given lower cost to serve/higher utilization."
On the stock market today, Uber stock fell 1.7% to close at 60.21. Shares gained as much as 1.5% in morning action Thursday before reversing. The loss breaks a three-day streak of gains. Uber stock is up a half-percent for the week but down 16% this month.
Uber's Waymo, Tesla Concerns
After a nearly 150% rally in 2023, Uber is trading a half-percent lower year-to-date entering Thursday's trading. But investors have taken a more bearish view on Uber mostly because of robotaxis. Concerns about autonomous vehicles have weighed on shares of both Uber and Lyft since Tesla Chief Executive Elon Musk first teased the company's robotaxi plans in the spring.
Uber has described itself as a partner to robotaxi developers, but investors appear concerned that instead the app's ride-hail dominance could be challenged by autonomous offerings from Tesla and the Alphabet-owned Waymo.
Waymo is already providing more than 150,000 paid trips each week. Tesla, meanwhile, is targeting next year to launch a ride-hailing service.
Shares of Uber sank more than 10% on Dec. 5, after Waymo announced it would expand its Waymo One app to Miami. Waymo has partnered with Uber to offer rides through the Uber app in Phoenix and for its upcoming expansions in Austin and Atlanta. Investors appeared startled when Uber was not mentioned in Waymo's latest expansion announcement.
But Helfstein countered that robotaxis will ultimately grow the total addressable market for ridesharing. And there are significant questions ahead for rolling out autonomous ride-hailing, including the utilization and maintenance for the vehicles, the steep costs to build a logistics platform, the need to expand charging infrastructure and the likelihood that a robotaxi service would need to price "meaningfully below" Uber and Lyft.
Helfstein is the latest analyst to come to Uber's defense following the sell-off earlier this month. Analysts with Evercore ISI also named Uber a top pick for 2025. The stock is generally a Wall Street favorite, with 88% of the 58 analysts following Uber recommending it as a buy, according to FactSet.
Uber Stock Technical Ratings
Still, Uber stock has a big hole to climb out of. Its Relative Strength rating has degraded to a 20, compared to 80 out of a best-possible 99 just three months ago, according to IBD Stock Checkup.
The slide earlier this month for Uber dragged shares back below the stock's long-term 200-day moving average and shorter-term 21-day line. It remains below each of those levels.
Overall, Uber stock has an IBD Composite Rating of 72 out of a best-possible 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
And there will be more robotaxi news to come. Bloomberg reported Thursday that Tesla has been in touch with city officials in Austin about its autonomous vehicle technology.
