Bank of America resets Uber stock price after earnings | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Uber Technologies posted a strong fourth quarter, but stock pullbacks show that investors are focused on what lies ahead. Analysts are not entirely optimistic about its near-term profitability, as they are concerned about margin compression.

At least one bank thinks investors need to brace for choppier near-term profitability as the company reinvests in tech expansion. The transport and food delivery player is currently at a crossroads between technical advancement and a legal fight that may set a precedent for future battles.

Uber sees solid Q4, but mixed Q1 setup

Uber announced its fourth-quarter and full-year 2025 reports on Feb 4, 2026, and has since seen several banks lower their price targets, primarily due to weak future guidance.

In a post-earnings note shared by the Bank of America, it reiterated a buy rating but lowered its price target from $110 to $103, simultaneously adjusting its EPS (earnings per share) estimates for the following year, even with strong bookings momentum.

More Tech Stocks:

Uber reported non-GAAP EPS of $0.71, up 27% year over year, and estimates Q1 2026 EPS of $0.65 to $0.72.

BofA described the Q4 results as solid, with revenue above expectations and bookings growth accelerating. Uber reported $54.1 billion in gross bookings, up 22% year over year, and $14.4 billion in revenue, up 20% year over year.

Yet, the market’s reaction was cold, as the company’s stock declined nearly 6% this past week, about 5% post-results.

Uber’s reported EBITDA at $2.49 billion was only slightly above the Street consensus of $2.48 billion, as the company continues to invest in growth initiatives.

However, the Q1 estimates also raise concerns over “increasing investment spend.”

Based on Uber’s Q1 guidance, it expects EBITDA of $2.37 to $2.47 billion, versus the Street’s consensus of $2.45 billion.
It also sees Gross Bookings of $52.0-$53.5 billion, well above the Street consensus of $51.4 billion.
This implies a 5.6% incremental EBITDA margin, down from the 7.3% margin it reported for 2025, a decline that fuels concerns about rising expenditures.

Some of these investments can be seen in delivery supply, membership, and lower-cost mobility products, which BofA sees as a trade-off for long-term growth and positions it well relative to its competitors.

Some immediate benefits were seen in increased UberOne membership, up 55% to more than 46 million members globally. Similarly, the decline in Mobility take rate looks consistent with Uber’s strategy of investing in lower-cost ride products.

Mobility take-rate is essentially the share of the money the rider spends that Uber keeps as revenue after paying drivers and incentives.

It may result in a smaller cut near-term, but in the long term, the decision will support growth and keep bookings growth competitive with peers.

Bank of America’s estimate changes

It raised the Q1 2026 gross bookings forecast to $53.1 billion, up 3%.
BoA cut its revenue estimate to $13.1 billion, down 5%, due to accounting reclassification in the U.K.
It lowered its EBITDA estimate by 1% to $2.449 billion for Q1.
For the full year, it raised its gross bookings estimate by 2% to $232.8 billion.
BoA lowered its revenue estimate to $57.7 billion, down 6%
EBITDA was trimmed by 1.5% to $11.00 billion.
It lowered its 2026 EPS estimate to $3.25 from $3.57.

Uber’s autonomous vehicle bet

The reinvestment is also linked to Uber’s longer-term strategy to expand its offerings with autonomous vehicles. BofA noted that the company made a strong case for it, that AVs are accelerating industry growth, and that it expects Uber to benefit as more of its AVs come online.

Uber expects AV deals coming in the first half of 2026 and aims to roll out vehicles in 15 cities globally by the end of 2026.

One such deal was announced a day after its earnings report. On Feb. 6, Uber unveiled a partnership with WeRide, a global leader in autonomous driving technology, to deploy 1,200 robotaxis across the Middle East.

The deployment is expected to be completed by 2027 and will span Abu Dhabi, Dubai, and Riyadh.

This is also an apt time for AV expansion, according to BofA Global Research.

“Cars represent the largest market at $700 billion by 2040; the addressable market more than doubles to $1.2 trillion when including trucks, public transport, industrial, and off-road applications.”

Another reason is decreasing tech costs. In China, hardware costs for robotaxis have fallen “by more than 50% compared to previous AV models,” BoA added. This is on top of the money saved by eliminating the cost of drivers.

Why banks trimmed Uber price targets

Despite optimism over decisions and a strong earnings report, analysts cut price targets after Uber’s earnings report.

BofA said it sees above-sector growth and a big opportunity in autonomous vehicles, but lowered its price target due to lower EPS expectations and because the “strong 4Q bookings growth did not flow to EBITDA.”

Citi analyst Ronald Josey lowered the price target to $110 from $120 while keeping a buy rating, despite confidence in Uber’s ability to deliver elevated mobility bookings growth.

Wedbush lowered the price target to $75 from $78, keeping a neutral rating, citing that investors are underestimating the rate of change in autonomous vehicle adoption while overestimating Uber’s position when it happens, according to TheFly.

Goldman Sachs also lowered its target to $125 from $126, keeping a buy rating, noting that for the next 12-18 months, Uber is well positioned to scale its core markets and expand profitability, which could later push investors to re-rate Uber’s long-term growth, margins, and free cash flow potential.