Uber falls 3.6% on profit outlook miss, CFO transition
Adjusted EPS misses estimates as margin concerns grow amid cheaper ride promotions
Uber Technologies shares fell 3.6% to $77.93 in Wednesday trading after the ride-hailing giant reported fourth-quarter earnings that missed profit estimates and provided a weaker-than-expected outlook for the current quarter, adding to investor concerns about margin pressure.
The company reported adjusted earnings per share of $0.71, falling short of the $0.80 consensus estimate, according to analyst forecasts. Revenue for the quarter reached $14.4 billion, slightly exceeding expectations of $14.32 billion and representing 20% year-over-year growth. However, the bottom-line disappointment overshadowed the top-line beat, sending shares down more than 8% in premarket trading before the session opened.
Gross bookings increased 22% to $54.1 billion, while total trips grew 22% to 3.8 billion, driven by the company's food delivery business, which saw revenue increase 30% and beat analyst estimates. The strong growth in trip volume came as Uber deployed cheaper rides to attract price-sensitive consumers, a strategy that has boosted market share but compressed operating margins.
Looking ahead, Uber forecast first-quarter adjusted earnings per share between $0.65 and $0.72, below the $0.75 analyst consensus. The guidance reflects ongoing margin pressure as the company balances growth investments with profitability targets. Analysts have grown increasingly focused on the durability of Uber's margins, with some forecasts suggesting profit margins could shrink from 26.7% to 13.7% over the next three years even as revenue continues to expand.
In a significant leadership change, Uber announced that Chief Financial Officer Prashanth Mahendra-Rajah will step down on February 16, 2026, transitioning to a senior finance advisor role until July 1. He will be replaced by Balaji Krishnamurthy, currently vice president of strategic finance, who joined Uber in 2019 and previously led investor relations. The company emphasized that the transition is not related to any disagreements over financial disclosures or accounting practices.
Krishnamurthy's appointment comes as Uber accelerates its robotaxi strategy, positioning the company for what executives view as the future of autonomous transportation. Rather than developing self-driving technology in-house after selling its autonomous vehicle division in 2020, Uber is pursuing partnerships with established players. The company plans to introduce robotaxi services in more than 10 markets by the end of 2026.
Key partnerships include collaborations with Mercedes-Benz and NVIDIA to deploy autonomous S-Class sedans with Level 4 driving software, as well as existing integrations with Waymo in Austin and Atlanta. Uber is also working with Lucid to deploy potentially 20,000 or more robotaxis, and has partnered with Waabi, aiming to deploy over 25,000 of its autonomous vehicles on the Uber network. The company is targeting a rollout of 100,000 autonomous vehicles over time, starting in 2027.
Analyst sentiment remains broadly positive but increasingly cautious. Of the 55 analysts covering Uber, 46 rate it a buy or strong buy, with an average price target of $109.57, according to market data. However, Melius Research downgraded Uber to sell in January citing increased competition risks from autonomous vehicle fleets operated by Waymo and Tesla.
The broader context for Uber includes intense competition in the autonomous vehicle space, with rivals like Waymo, Tesla, and traditional automakers developing their own robotaxi platforms. While Uber's partnership strategy allows it to leverage external technology rather than bear development costs alone, analysts are monitoring the potential impact on Uber's market share and valuation as autonomous fleets expand.
Uber's market capitalization stands at approximately $168.6 billion, with the stock trading at 41.7 times trailing earnings. The company's forward price-to-earnings ratio of 19.8 suggests investors expect continued earnings growth despite near-term margin challenges. With the CFO transition and accelerating robotaxi investments, investors will be watching closely for signs that profit momentum can be restored while the company prepares for the autonomous driving era.