Key insights
- The author questions Uber's bullish sentiment, citing accounting concerns. They argue Uber's reported PE ratio is misleading due to a one-time benefit, with an adjusted PE closer to 40. Furthermore, declining earnings and revenue growth not justifying a high PE, coupled with issues in Free Cash Flow (FCF) due to failed investments and insurance accruals, suggest the stock may not be undervalued. This analysis implies potential downside risk for Uber's stock if these accounting and fundamental issues are not addressed.
Glancing through all the comments in one of the previous posts I noticed a generally positive sentiment about Uber on this sub. So I am genuinely wondering what people who are Uber bulls see that I am missing.
I research stock starrting from the “accounting side”. If the accounting fundamentals don’t make sense I skip going through the qualitative reasearch as that takes more time. In other words, I use the accounting fundamentals as a filter, and stocks that don’t pass the test, I don’t dig any deeper.
Now Uber…
Their PE is reported as 17-18 in most outlets, however they had a huge $6.6B one-time pre-tax benefit in Q3 2025 that severely inflates their earnings. When adjusted for that, their PE is ~40. Now, paying for PE of 40 would be okay for a fast growing company and growth investors, however their earning and margins have been going down substantially lately (I believe their earning are down 85% Y/Y Q1 2026, while the revenue is “only” up 18%. And I say “only” because for a PE of 40 you would expect at least 30% growth in revenue, and definitely not a declining earnings trend.
And you can’t look at their FCF because they had a bunch of failed equity investments that are degrading the company fundamentals. Uber is also accruing insurance reserves faster than they are paying the claims. None of these are showing up in the FCF, so the FCF looks pristine (today), but at the expense of future cash flows one all those claims come due.
So I don’t find Uber undervalued at all by traditional metrics, so what is there for Uber qualitatively to make it so popular in this sub?