Can Uber Stock Drop 40%?

Uber Technologies (NYSE:UBER) stock has been on a wild ride, hovering near $100 and sitting at all-time highs — a level that would’ve sounded ridiculous a few years ago when the company was still burning cash and struggling to prove it could ever turn a profit. Today, it’s a different story. Uber is finally profitable, generating consistent free cash flow, and is being re-rated by investors as a mature tech platform rather than a speculative startup. Year to date, the stock has risen a whopping 55%, thanks to stronger-than-expected earnings, expanding margins, and a business that now runs more like a finely tuned machine than a chaotic disruptor. But if you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell, and S&P MidCap indexes—and has achieved returns exceeding 105% since its inception. Separately, see – Oklo Stock: The Zero-Revenue Company Worth $20 Billion.

Over the trailing twelve months through mid-2025, Uber has delivered around $8.5 billion in free cash flow, translating to roughly $4 per share, while adjusted EBITDA continues to grow in the low-30% range year-on-year. That’s a massive improvement compared to a few years ago when losses seemed endless. In fact, Uber’s free cash flow jumped from just $3.3 billion in 2023 to nearly $6.9 billion in 2024, more than doubling in a year. The company’s gross bookings have been expanding in the high-teens, and it’s managed to keep costs in check despite inflationary pressures. By most measures, Uber looks like a genuine success story — but that’s also exactly where the risk lies. Also, see the contrary, Can Uber Stock Grow 2x?

Photo by Mohamed_hassan on Pixabay

At nearly $100 a share, Uber is trading at roughly 24 times free cash flow, which is rich for a business that still faces cyclical risks. The stock price already bakes in several years of smooth, uninterrupted growth. Any sign of weakness — whether it’s a slowdown in ride volume, lower delivery margins, or increased competition — could shake investor confidence quickly. Remember, Uber’s business remains tightly linked to macro trends. If consumer spending slows or fuel prices spike, fewer people take rides, drivers get squeezed, and demand can taper off. Regulatory uncertainty also hangs over the company, especially around driver classification and labor laws that could lift costs across its global footprint.

Competition is another underappreciated risk. Lyft, while smaller, has become more efficient; DoorDash continues to defend its delivery turf; and new regional ride-hailing apps keep popping up in emerging markets. Uber’s ad and freight businesses — touted as new growth engines — are still nascent and could see volatility if ad budgets or freight volumes decline in a weaker economy. In short, the margin for error is shrinking.

Now, could Uber’s stock really fall 30–40% from here? It’s entirely possible. If growth slows from around 18% to low double-digits, and the market re-rates Uber’s valuation from 24x to something more realistic like 15–18x free cash flow, the stock could easily slip back to the $60–$70 range. That’s not a doomsday scenario — just a typical reversion to fair value if sentiment cools. The market has seen this movie before: Uber has had multiple drawdowns of 30–50% even during growth phases, often triggered by short-term macro fears or disappointing guidance. Also see: How low can Uber stock go?

The difference now is that Uber finally has the numbers to back its valuation. It’s generating billions in free cash flow, sitting on a stronger balance sheet, and has even authorized share buybacks, giving it a financial cushion that didn’t exist in its early years. That should limit the downside in a prolonged correction. Still, in a risk-off environment — where investors rotate out of growth stocks and valuation multiples compress — even solid companies can take a hit.

In short, Uber’s long-term story looks as strong as ever, but at current prices, the risk-reward feels stretched. A 30–40% drop wouldn’t mean Uber is broken — it would simply bring expectations back in line with reality. The company has done an impressive job rewriting its narrative, but the stock’s next chapter might not be about meteoric growth; it might just be about holding on to what it’s already achieved.

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