Uber Bullish Article Clashes with DeepValue's Cautious Risk Assessment

What happened

A Seeking Alpha article published on January 24, 2026, rates Uber as a Strong Buy with a fair value of $115–$125, arguing the market underestimates its platform economics and that autonomous vehicles will complement rather than disrupt its model. DeepValue's latest master report, based on SEC filings through Q3 2025, maintains a 'WAIT' rating, noting Uber's $177 billion valuation at $85.29 per share already prices in mid-teens bookings growth and stable 4-5% EBITDA margins. The report highlights critical risks, including autonomous vehicle partnerships potentially eroding take-rates, EU labor cost increases from the Platform Work Directive, and free cash flow compression from rising capital intensity. Uber's reported net income is inflated by $11.3 billion in non-recurring tax valuation releases and over $3 billion in unrealized gains on equity securities across 2024 and Q3 2025, masking core operational challenges. This contrast reveals a persistent gap between optimistic external narratives and the firm's internal risk-focused analysis, emphasizing the need for evidence on margin durability.

Implication

The bullish article overlooks DeepValue's identification of elevated valuation multiples, with Uber trading at 34x EBITDA, and sensitivity to accounting adjustments that distort true earnings quality. Autonomous vehicle partnerships, while framed as complementary, risk disintermediation if providers like Waymo or Tesla bypass Uber's platform, threatening take-rates and long-term margins. Regulatory headwinds, particularly from EU labor reclassification, could structurally increase costs and undermine the profitability transition narrative. Uber's free cash flow, though strong, faces pressure from rising capital intensity for AV expansion, potentially impacting its ability to sustain large share buybacks. Therefore, investors should await Q4 2025 results and 2026 guidance for clarity on margin trends and AV funding, considering entry only if prices approach the $75 attractive level to improve risk-reward.

Thesis delta

The Seeking Alpha article does not alter DeepValue's core thesis, which remains that Uber's current valuation embeds optimistic assumptions and lacks a margin of safety due to unresolved AV and regulatory risks. It reinforces the bull scenario where AV partnerships are margin-accretive, but this is already captured in DeepValue's $115 bull case and depends on unproven economics. No shift in the 'WAIT' rating is warranted until operational data confirms sustained EBITDA margins above 4.5% and free cash flow stability amid rising investments.