Should You Bet on UBER Stock Following Its Q2 Earnings Beat?

Last week, Uber Technologies UBER reported strong second-quarter 2026 results with respect to the bottom line. Quarterly revenues, however, fell short of expectations. While the third-quarter outlook for gross bookings was impressive, the projection for earnings per share was below par.

Given this backdrop, let’s first review the second-quarter results.

UBER’s Q2 Earnings Snapshot

Earnings of $1.17 per share rose 85.7% year over year and exceeded the Zacks Consensus Estimate by 41%. The company’s earnings beat three of the past four quarters, missing the mark on the other occasion. The average beat is 99.5%.

Uber Technologies Price and EPS Surprise

Uber Technologies price-eps-surprise | Uber Technologies Quote

Quarterly revenues of $14.19 billion increased 12.2% year over year. The company saw impressive growth in its delivery and mobility segments, boosting the top line.

Gross bookings grew 22% on a constant currency basis year-on-year to more than $58 billion, above the high end of the company’s guidance and marking the fourth consecutive quarter above 20% growth for this key metric. Trips also accelerated with results benefiting from travel linked to the FIFA World Cup.

Uber’s ride-hailing business benefited from the mega event with millions of tourists taking rides across host cities in the United States, Canada and Mexico. Operating income also increased significantly during the June quarter, with operating cash flow increasing 12% to $2.9 billion. Moreover, trailing 12-month free cash flow exceeded $10 billion for the first time.

Gross Bookings Q3 View Impressive Despite FX Woes

For the third quarter, Uber expects gross bookings in the band of $58.25-$60.25 billion. The mid-point of the guided range is roughly in line with the Zacks Consensus Estimate of $59.2 billion. Unlike the previous few quarters, foreign exchange is likely to trim the metric by roughly 1 percentage point.

Despite that, the gross bookings forecast implies 18% to 22% year-over-year growth on a constant-currency basis. Adjusted EBITDA is forecasted in the $2.86-$2.96 billion band. Third-quarter adjusted earnings per share are expected in the 80-84 cents band. The Zacks Consensus Estimate is currently pegged at 90 cents per share.

Uber’s AV Ambitions Impress

In view of the rapidly expanding autonomous vehicle (“AV”) market, Uber is adopting a partnership-focused strategy to capitalize on emerging opportunities. By working alongside multiple technology leaders, the company has been able to avoid the substantial research and development costs associated with building in-house AV capabilities, while still progressing toward its automation ambitions.

Uber’s CEO Dara Khosrowshahi, on the second-quarter conference call, dismissed speculations of Alphabet’s GOOGL Waymo considering ending their partnership. The CEO stated that he expected Uber and Alphabet’s Waymo to continue operating together in Austin and Atlanta. Apart from the partnership with Alphabet’s Waymo, Uber has associations with many other vehicle firms, as it aims to gain a stronghold in the robotaxi market. Uber expects to operate in 15 markets by 2026.

UBER’s Overall Price Performance Is Unimpressive

Despite the second-quarter earnings beat, shares of UBER have declined in single digits (% wise) so far this year. UBER’s shares have also underperformed the Zacks Internet-Services industry over the same time frame. Rival Lyft’s LYFT shares have performed even worse.

YTD Price Comparison

Image Source: Zacks Investment Research

Valuation Picture

From a valuation perspective, Uber’s shares are cheaper compared with its industry. The company has a Value Score of C. Shares of Lyft are cheaper. Lyft has a Value Score of B.

UBER’s P/E F12M Vs. Industry & LYFT

Image Source: Zacks Investment Research

How to Play Uber Stock Post-Q2 Earnings?

Despite Uber’s weak stock performance, elevated debt burden and persistent macroeconomic pressures creating short-term headwinds, the long-term outlook for the ride-hailing leader remains encouraging.

The company’s emphasis on strategic diversification and shareholder-oriented initiatives continues to serve as a major strength. Backed by a robust market capitalization of $152.71 billion, Uber remains well-positioned to navigate the current economic uncertainty. Its diversification strategy — spanning acquisitions, international expansion and innovative service offerings — has played a vital role in reducing risks and reinforcing its competitive standing.

Overall, Uber’s large-scale operations, AV ambitions, strategic investments and diversification efforts create a strong platform for long-term growth. Maintaining positions in this Zacks Rank #3 (Hold) stock, despite the year-to-date price decline, appears to be a sensible approach at present, while potential investors may prefer to wait for a more attractive entry opportunity.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

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This article originally published on Zacks Investment Research (zacks.com).

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