Uber Technologies Inc (NYSE:UBER, ETR:UT8) may have steered its business model through the post-pandemic recovery with precision, but analysts at Wedbush believe the easy wins are now in the rear-view mirror.
In a note out Thursday, the broker downgraded the ride-hailing and delivery giant to neutral from outperform and cut its price target to $85.
The decision follows what it described as a mixed first-quarter update, where adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) beat estimates by a whisker but gross bookings slightly missed expectations.
Total gross bookings reached $32.8 billion, up 13.7% year-on-year and within the company’s guided range, but about 1% below consensus. Mobility bookings grew at a similar pace; decent, but not particularly eye-catching.
Looking ahead, second-quarter guidance was more encouraging, with bookings expected to rise between 14.5% and 18.3%, ahead of forecasts. Adjusted EBITDA is guided between $2.02 billion and $2.12 billion, roughly in line with market estimates.
Still, Wedbush argues that Uber’s days of consistent outperformance may be behind it. “The magnitude of beats versus estimates has contracted materially,” the analysts wrote, adding that while the business is now well understood, the lack of near-term catalysts limits potential for further multiple expansion.
Uber is currently trading at around 17 times 2026 EBITDA, a premium to the wider mobility peer group, which the broker believes could prove difficult to sustain if macroeconomic conditions deteriorate.
The cyclical nature of the business, combined with growing uncertainty around consumer behaviour, makes the risk-reward trade-off less compelling than in prior quarters.
The downgrade aligns with a broader cautious stance from Wedbush, which last week also took a more defensive position on Airbnb, reflecting similar concerns around cyclical exposure and investor expectations.
In short, Uber’s engine is still running smoothly, but without fresh fuel in the form of new catalysts or outperformance, investors may want to ease off the accelerator.
Ahead of the bell, Uber shares were slated to rise 0.7% after falling 2.6% on Wednesday.