Maintain Buy, Target Price Lowered to $115; Q1 Total Gross Bookings Exceeded Expectations

Overview

This report reviews Uber's performance for the first quarter of 2026. Goldman Sachs believes that despite macro headwinds such as geopolitical tensions in the Middle East and weather conditions in the U.S., Uber has achieved a strong start through its platform strategy, product innovation, and cross-business synergies. Key highlights include revenue surpassing expectations, resilience in the mobility segment, growth in non-food verticals within delivery services, and ongoing shareholder returns. Based on these factors, Goldman Sachs maintains its 'Buy' rating but slightly adjusts the 12-month target price from $125 to $115 due to recent downward revisions in tech sector valuation multiples.

Core views

Performance & Operational Highlights: Q1 total gross bookings reached $53.72 billion, representing robust year-over-year growth and exceeding Goldman Sachs' forecast by 2% and the market consensus by 2%. This includes $26.39 billion in Mobility, $25.99 billion in Delivery, and $1.33 billion in Freight. Although total trips were slightly below expectations, improvements were seen in California cities due to insurance savings and broad strength in consumer commuting and travel demand supported the mobility business. The delivery segment grew driven by key international performances and increased supply-demand dynamics in non-food verticals such as groceries and retail. Profitability & Capital Allocation: Q1 adjusted EBITDA came in at $2.48 billion with a margin of 4.6%, outperforming expectations and demonstrating operational leverage as the company balanced growth investments with scale advantages. Management continued executing a diversified capital allocation strategy, completing $3 billion in share buybacks during Q1, leaving $16 billion still available under authorization. Additionally, growth trends for the Uber One membership service showed strong user engagement and cross-selling opportunities. Future Growth Drivers: The report emphasizes progress in autonomous vehicles (AV), new verticals (e.g., travel, grocery retail), and artificial intelligence (AI). Partnerships advancing autonomous vehicle initiatives are scaling up, with plans to launch globally across 15 markets by year-end. On the AI front, tools targeting external users (such as Cart Assistant and Earner Assistant) have shown early positive signs, while internal applications accelerate innovation and reduce costs. These elements collectively support Uber's long-term compounding growth potential as a platform company.

Analysis framework

Goldman Sachs employed a combination of disaggregated analysis and integrated valuation approaches. First, they assessed each business line's execution against actual Q1 data versus expectations (both Goldman Sachs' predictions and market consensus). Second, attention focused on management guidance concerning macro environments, competitive landscapes, and capital allocation strategies, particularly regarding responses to disruptions from autonomous driving technology and industry competition. Finally, at the valuation level, relative valuations (EV/EBITDA) and absolute models (Discounted Cash Flow/Free Cash Flow) were combined, referencing broader industry valuation trends to dynamically adjust the price target.

Methodology notes

• Valuation MethodEV/EBITDA valuation

  Enterprise Value Multiple Approach

  The research used an EV/GAAP EBITDA multiple of 19.0 applied to projected future 12-month figures to estimate company value, which is a commonly used relative valuation metric for high-growth tech companies capable of filtering out capital structure and tax impacts.

• Valuation MethodDCF Cash Flow Discounting

  Free Cash Flow Discount Model

  A modified DCF model based on free cash flows after subtracting share-based compensation (FCF-SBC) was utilized, discounting future cash flows at a rate of 12% derived from the CAPM model to capture intrinsic long-term value.

• Quantitative/Factor/Portfolio TheoryBeta/alpha analysis

  Beta Coefficient and Discount Rate Setting

  For determining the DCF discount rate, the report incorporated an average beta value of approximately 1.3, reflecting higher theoretical volatility compared to the market and aligning with typical risk characteristics of growth stocks.

• Industry/Industrial Analysis FrameworkUpstream-Midstream-Downstream Supply Chain Transmission

  Platform Ecology and Cross-Selling

  The analysis examined how Uber integrates its mobility, food delivery, and freight businesses, leveraging the Uber One membership system to facilitate user cross-selling and frequency increases, illustrating network effects and flywheel dynamics inherent in platform economies.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Uber Technologies Inc. (UBER.US)

  Direct Coverage, Benefiting from Platform Strategy, AI Efficiency Gains, and Scalable Autonomous Vehicle Collaborations

  Strengths

  Strong operational leverage, diversified business portfolio (mobility + delivery + freight), robust cash flow generation capabilities, and shareholder return policies

  Weaknesses

  Exposed to economic headwinds and geopolitical risks, potential long-term supply-side disruption from autonomous vehicle technology

  Comparison

  Unique advantages over peers in cross-platform cross-selling and global market expansion

  Risks

  Regulatory environment changes (driver classification, commission caps), intensifying competition, normalization of consumer spending habits

Key data

• Q1 Total Gross Bookings$53.72 BillionExceeding Goldman Sachs' expectation by 2% and market consensus by 2%
• Q1 Adjusted EBITDA$2.48 BillionMargin of 4.6%, exceeding expectations, indicating operational leverage
• Q1 Stock Repurchase Amount$3 BillionRemaining authorized额度$16 Billion
• 2026 EPS Forecast (New)$3.02Lower than previous forecast of $3.59
• 12-Month Target Price$115Reduced from $125, based on 19.0x EV/EBITDA and DCF model

Impact & implications

Goldman Sachs expects this earnings release to receive a positive investor response, especially given concerns about the long-term impact of autonomous vehicles on the industry. Uber's demonstrated ability to deliver compounded growth on both revenue and profit fronts will likely attract significant attention. Over the coming quarters, investor narratives will center around macro activity levels impacting consumption and enterprise usage, competitive dynamics within each operating unit, and management’s balancing act between returning capital, investing in growth areas like AVs and AI, and managing capital allocations. The lowered target price primarily reflects a contraction in overall industry valuation multiples rather than any deterioration in the company's fundamental outlook.

Risks

• Slower growth in mobility ride-hailing potentially caused by demand elasticity, market maturity, or AV competition
• Regulatory shifts surrounding driver classification (including pay and benefits), merchant commission caps, and ESG considerations
• Intensified competition in mobility and delivery segments (including local commerce/logistics)
• Normalization of discretionary spending habits among consumers in the delivery business
• Fluctuations in the global macroeconomic environment and evolving investor risk appetite towards growth stocks

What to watch

• Changes in macro activity levels affecting consumer and enterprise usage
• Evolving competitive dynamics across operating units (mobility, delivery, freight)
• Management's balancing strategy between shareholder returns, growth investments (like AVs, AI), and capital allocation
• Progression of autonomous vehicle collaborations in 15 targeted global markets
• Actual effectiveness of AI tools in reducing costs and accelerating innovation