Uber: Insiders Buy at the Lows, but the Multiple Isn't a Gift

On September 4, Uber's president and chief operating officer, Andrew Macdonald, spent $5.3 million of his own money buying 70,000 shares on the open market at roughly $75 a share. It was his first-ever open-market purchase of Uber stock. The timing was striking: the trade landed two days after Uber announced its biggest job cuts since the pandemic. When the No. 2 executive puts cash on the table at market prices right after announcing 3,300 layoffs, it is worth asking whether someone close to the business believes the market has beaten the stock down too far.

Read the signal, and the seller next to it

Buying matters more than selling in insider land, and not because executives are honest. Selling happens for dozens of non-informative reasons — taxes, diversification, a pre-arranged 10b5-1 plan that executes on autopilot. Buying stock on the open market with your own money happens for essentially one reason: you think the price is attractive relative to what you know. Macdonald's purchase is also not an isolated event; the CFO spent roughly $1.6 million buying shares in February, making the COO's trade the second open-market insider purchase in six months.

The other side of the ledger deserves an honest look. The CEO, Dara Khosrowshahi, is not buying. A year ago he sold $28.6 million of stock near $95 under a pre-arranged trading plan, and he now owns about 1.2 million shares outright. A management team that is buying while the CEO was selling on the way down is not a single, tidy vote of confidence — it is a mixed signal, which is exactly how it should be treated. What the buying does establish is that senior operators, after watching the stock fall roughly a quarter over the past year, chose to deploy their own cash rather than conclude the business was broken.

Why the market sold it

The stock sits near $72, roughly 28 percent below its 52-week high near $102, and down about 11 percent year to date over a year in which it fell about a quarter. The market's explanation has three parts, and only one of them is about the current quarter.

The big one is autonomous vehicles. The fear is that robotaxis from Waymo or Tesla disintermediate Uber's asset-light model — that Uber, which owns no cars, loses the middleman role it profits from. Uber's answers are real: it has launched autonomous rides in London using Wayve's AI, its second European city after Zagreb, and it runs Waymo vehicles through its app in Atlanta and Austin. But this is the live strategic question, not a settled one, and it is why the stock carries an AI-risk discount that a traditional compounding grower would not.

The other two pressures are nearer-term. In early August, Uber matched revenue estimates but guided third-quarter bookings at a $59.25 billion midpoint, just under the roughly $59.3 billion the street expected, and the stock sank about 5 percent on the day. And in July the company launched a roughly $14.8 billion cash offer for Delivery Hero, funded in part through a new bridge facility of about €14 billion — money it plans to pay back while also buying back stock.

The numbers the selloff is ignoring

Here is the mismatch that makes the insider buying worth taking seriously. The operating deterioration the price move implies has not shown up in the reported results. In the second quarter, gross bookings grew 22 percent year over year on a constant-currency basis and trips grew 18 percent, while GAAP operating income reached $1.9 billion and non-GAAP operating income rose 40 percent to $2.1 billion. Revenue grew about 12 percent year over year to roughly $14.2 billion.

Over the trailing twelve months the picture is similar: revenue growth near 17 percent, a gross margin around 42 percent, free cash flow of roughly $10.1 billion up 18 percent, and a free-cash-flow margin near 18 percent. Uber is capital-light — it barely owns vehicles, with capex under $0.5 billion — which is why those cash-flow margins are so high, and why a growth-plus-cash machine with roughly 25 percent return on invested capital does not usually shelter at a quarter off its highs.

Is the reset enough?

The buy-the-dip case rests on valuation having reset faster than the business deteriorated, and in price terms it has. The stock trades around 2.7 times sales, about 21 times trailing EBITDA, and roughly 15 times trailing earnings. Pay attention to that last figure: trailing earnings include one-off items, so it flatters the picture. The cleaner figure is the forward multiple, near 24 times expected earnings — a fair price for a mid-teens grower with an 18 percent free-cash-flow margin, but not a gift. The selloff took Uber from expensive to reasonable; it did not make it cheap.

Two unresolved questions keep that from becoming a clear bargain. First, robotaxi economics: does Uber end up as the profitable distribution and fleet-operating layer for self-driving cars, or does it get squeezed out of the trips it monetizes today? Second, Delivery Hero: a deal that roughly adds a chunk of debt and only closes in the second half of 2027, with integration and leverage to prove out. The $20 billion buyback authorized in August 2025 — about 13 percent of today's market value — is management's clearest statement that it sees the reset price as a good place to retire shares, and it is consistent with the insider buying.

What changes the call

The honest read is a constructive lean, not a standing buy. Management put real money behind the stock at the lows, the buyback is large, and the price reset has outrun any operating deterioration in the reported numbers — all prerequisites for the risk/reward to tilt favorable. But the forward multiple is merely fair, the CEO is not buying, and the two structural questions, robotaxi disruption and the leverage from the Delivery Hero deal, are genuinely unresolved.

The proof window is the next two to four quarters. If gross-bookings growth holds in the low twenties while free cash flow keeps compounding at a mid-teens pace, the current multiple starts to look justified — that is the evidence the insider buying foreshadows. If, instead, bookings growth decelerates hard without the valuation compressing further, or the Delivery Hero deal levers up the balance sheet at a bad time, then the "cheap after a reset" argument dies on contact. Until one of those resolves, this is a stock to hold on your watch list with a reason, not one to chase on a headline about an executive buying his own shares.