Uber’s Growth Strategy Tests Investor Patience as Margins Narrow

Uber Technologies Inc. concluded its 2025 fiscal year by posting record figures for both gross bookings and revenue. However, investor enthusiasm was tempered by a disappointing near-term forecast and an unexpected leadership transition within its finance department. The company's strategic pivot toward autonomous vehicle technology now faces scrutiny as it balances long-term ambition against immediate profitability concerns.

Coinciding with its earnings release, Uber announced a change at the helm of its finance operations. Balaji Krishnamurthy is set to assume the role of Chief Financial Officer from Prashanth Mahendra-Rajah on February 16. Market observers note that Krishnamurthy is a recognized proponent of the company's autonomous driving (AV) initiatives. This appointment underscores CEO Dara Khosrowshahi's commitment to accelerating technological transformation.

The ride-hailing giant aims to operate autonomous vehicle services across 15 cities by the conclusion of 2026. To support this goal, Uber has recently strengthened partnerships with industry leaders, including Nvidia and Lucid Group. This long-term vision is central to the company's plan for reducing reliance on human drivers and enhancing operational efficiency over time.

Profitability Takes a Hit Amid Aggressive Pricing

Despite a 20% year-over-year surge in fourth-quarter revenue to $14.37 billion, Uber's adjusted earnings per share of $0.71 fell short of market projections. The net income figure saw a dramatic 96% decline to $296 million, primarily attributed to $1.6 billion in unrealized losses from a revaluation of its equity investments.

Should investors sell immediately? Or is it worth buying Uber?

The primary source of current market skepticism, however, stems from the guidance for Q1 2026. Management plans to stimulate user demand through targeted price reductions. While this tactic is intended to support volume growth, it is expected to exert immediate pressure on near-term profitability. Consequently, the company's profit targets for the upcoming quarter sit noticeably below prior analyst estimates.

Market Reaction and Technical Positioning

Disappointment regarding the forward outlook is clearly reflected in the equity's performance. The stock, currently trading at €62.81, now sits significantly below its 200-day moving average of €77.06. It has shed more than 8% of its value in the past week alone. Analysts interpret this pullback as a market reassessment of short-term margin risks, though many also highlight Uber's robust full-year 2025 free cash flow of approximately $10 billion.

Investor attention is now focused on the mid-February CFO transition. A key question is whether the price-cutting strategy can sufficiently accelerate user growth—the platform recently reported 202 million active customers—to offset the anticipated temporary margin compression. While a Relative Strength Index (RSI) reading of 27.8 suggests the stock is technically oversold, a fundamental recovery is likely contingent on the successful execution of its autonomous mobility objectives.