Uber Technologies (NYSE: UBER) recently entered correction territory. The stock of the global rideshare leader is stuck in a trading range, with no clarity on when it might break out.
Admittedly, a 14% pullback may not sound like a compelling discount. Still, with its remaining growth potential and low valuation, investors may have an opportunity that’s too potentially lucrative to ignore. Here’s why.
Uber has emerged as the global leader in transport. In 2024, 57% of its revenue came from its mobility segment, where it leads the world in rideshare.
Despite competing with Lyft in the U.S. and other rideshare services worldwide, Uber has emerged as one of the world’s most recognized brands in the rideshare space. Currently, it offers rides to customers in more than 15,000 cities spanning 70 countries.
Around 31% of its 2024 revenue comes from its delivery segment, which operates as Uber Eats. As the name implies, its drivers work to deliver food to customers. Although the company lags behind market leader DoorDash in this segment, it has leveraged the Uber name to become the second-largest food delivery company in the U.S.
Despite its expanse, many options for growth remain. It has found success in Uber One, a membership program offering customers both perks and savings for frequent Uber and Uber Eats customers.
Additionally, it is working on an autonomous driving segment. This partners with Alphabet‘s Waymo and General Motors subsidiary Cruise on driverless transport. This could place Uber’s popular platform in the center of the self-driving car market, and the potential for Uber to depend less on drivers could dramatically improve Uber’s profitability in the future.
The remaining 12% of the business involves freight deliveries. While this has not been a fast-growing segment of Uber, it has given customers an end-to-end logistics option to book, manage, and track freight shipments.
These segments combined to deliver $44 billion in revenue to Uber in 2024, an 18% increase over the previous year. Not surprisingly, the 26% growth in its mobility segment carried the company. The delivery segment grew by 13%, while Uber’s freight revenue dropped by 2%.
Uber also limited the growth in costs and expenses to 13%. Consequently, its 2024 net income came in at $9.8 billion, a substantial increase from the $2.2 billion it earned in 2023. Indeed, most of that rise came from a $5.8 billion tax benefit, but even when removing that one-time tax break, it experienced a massive increase in year-over-year profit growth.
