Uber Technologies Inc (NYSE: UBER) has had an incredible start to the new year but its year-to-date gains may only be a drop in the bucket compared to where the stock may be headed in 2025, according to Timothy Chubb.
The chief investment officer of Girard Advisory Services expects the ride-sharing stock to offer a few more positive surprises as we advance through the year.
On CNBC’s “Power Lunch”, the market veteran went on to count Uber stock among his highest conviction ideas for the next 12 months.
Uber’s growth story is underappreciated
Timothy Chubb expects Uber stock to extend its recent gains in the months ahead as it’s a “perfect example where the fundamentals of the core business are doing extremely well.”
The market, he’s convinced, is underappreciating user growth and engagement levels at Uber, as well as the strength of its free cash flow.
Last month, the ride-hailing giant came in shy of the quarterly earnings estimates and offered muted bookings guidance for its fiscal Q1.
However, the Girard Advisory expert sees that the expected weakness is temporary and continues to believe in the long-term potential of Uber Technologies Inc.
However, shares of the multinational transportation company remain unattractive for income investors as they do not currently pay a dividend.
Uber is expanding into robotaxi services
Uber has recently debuted a robotaxi service in collaboration with Waymo in Austin, Texas – and plans on launching a similar service in a bunch of other cities by the end of this year.
According to Timothy Chubb of Girard Advisory Services, the New York listed firm could benefit rather significantly as it continues to commercialise autonomous vehicles in the United States.
All in all, the chief investment officer sees Uber stock trading at north of $100 by early next year, which translates to about a 31% upside from current levels.
Wall Street seems to agree with Chubb considering the consensus rating on Uber shares currently sits at “buy”.
Is it worth buying Uber stock in 2025?
Uber stock is currently going for about 16 times earnings, which is not particularly cheap compared to its historical price-to-earnings ratio of less than 10.
But the company based out of San Francisco, California, may still be worth an investment at current levels as it’s expanding into robotaxis and advertising to diversify its revenue stream.
Together with the dominance Uber already has in ride-sharing and food delivery that continues to drive double-digit percentage gains in revenue despite the global scale, it’s reasonable to believe that its share price could push further up from here by the end of 2025.
Note that Uber share price is currently up more than 250% versus the pandemic
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