Uber's Record Q4 2025 Growth Masks Lingering Regulatory and Valuation Concerns

What happened

Uber announced Q4 and full-year 2025 results, touting over 200 million monthly users and 40 million daily trips as evidence of accelerating top-line growth and cash flow. The DeepValue master report had previously rated Uber as 'WAIT', noting its crowded valuation and high expectations for sustained high-teens gross bookings growth with stable 4.5%+ EBITDA margins. Despite the positive operational metrics, the report warns that margins are vulnerable to rising insurance, driver costs, and impending EU labor and AI regulations, which could erode profitability. Autonomous vehicle partnerships, while strategic, introduce capital commitments and execution risks that may pressure free cash flow and limit buyback capacity. Thus, while the latest results reinforce growth, they do not fundamentally alter the underlying risk profile highlighted in the analysis.

Implication

The strong user and trip growth confirm Uber's scale but are already priced into the stock at ~$82, aligning with the base case and leaving little room for surprise. Free cash flow sustainability is critical for the aggressive buyback strategy, yet rising costs and EU regulatory threats could compress margins and undermine capital returns. Autonomous vehicle progress must yield tangible economic benefits without partner disintermediation to justify current valuations, a high-risk bet given early-stage pilots. Monitoring Q4 margin details and regulatory developments is essential, as any shortfall from guided 17-21% gross bookings growth or 4.5%+ EBITDA margins could trigger downside. Therefore, patience is warranted, with better entry points likely near $70 if growth slows or risks materialize, per the DeepValue framework.

Thesis delta

The Q4 2025 results align with the base case scenario in the DeepValue report, showing growth but not exceeding the thresholds for an upgrade, such as gross bookings growth ≥15% with stable margins and 50% FCF buybacks. No material shift in the 'WAIT' rating is warranted, as regulatory and autonomous vehicle risks persist, and the stock remains crowded with optimistic sentiment. Investors should await clearer evidence on margin resilience and capital allocation before considering new positions, reinforcing the report's recommendation for a pullback or stronger confirmation.