Uber's Strategic Shift: Is Now the Time to Buy After the EV Incentive Cut and Analyst Target Revisions?

Uber Technologies (UBER) has long been a bellwether for innovation in the mobility and delivery sectors. However, recent strategic shifts-particularly the scaling back of electric vehicle (EV) incentives-have sparked debate among investors. This article evaluates whether the current market environment presents a compelling value entry point for Uber, balancing its revised analyst price targets, undervalued valuation metrics, and long-term growth initiatives.

The EV Incentive Cut: A Strategic Rethink

Uber's decision to phase out its EV incentive program marks a pivotal shift in its sustainability strategy. While the company initially offered substantial bonuses (e.g., $4,000) to drivers switching to EVs, these incentives have been reduced to a $200–$300 monthly bonus, contingent on completing 200 rides per month. This effectively excludes part-time drivers, narrowing the program's reach. However, Uber remains committed to its 2040 zero-emission goal, with interim targets such as 100% zero-emission rides in London and Amsterdam by 2025.

The incentive cut reflects a pragmatic recalibration. By reducing short-term costs, Uber can redirect capital toward R&D and expansion. Critics argue this may slow EV adoption among drivers, but the company's broader sustainability initiatives-such as integrating micromobility options (bikes, scooters) and sustainable packaging-suggest a diversified approach to decarbonization according to Uber's sustainability strategy.

Analyst Target Revisions: Optimism Amid Caution

Uber reported $13.5 billion in revenue (up 20% YoY) and $49.7 billion in gross bookings (up 21% YoY), leading to upward revisions in price targets. For instance, Arete Research raised its target to $125, while DA Davidson set a $108 target. The consensus 12-month price target now stands at $110.60, with a high of $150 and a low of $82 according to market data.

However, not all analysts are bullish. UBS lowered its target to $122 due to concerns about margin expansion in the Delivery segment according to recent reports, and Morgan Stanley reduced its target to $110 while maintaining an Overweight rating according to market analysis. These divergences highlight the tension between Uber's strong core performance and uncertainties in its autonomous vehicle (AV) and delivery segments.

Valuation Metrics: A Case for Undervaluation

Uber's current valuation appears attractive relative to its growth prospects. As of November 2025, the stock trades at a trailing P/E of 10.79 and a forward P/E of 24.96, significantly below the Transportation industry average of 26.68x. The PEG ratio of 0.80 further suggests undervaluation, as it implies the stock is trading at a discount to its expected earnings growth according to market analysis.

Discounted cash flow (DCF) analysis reinforces this view. A DCF model estimates Uber's intrinsic value at $168.03 per share, indicating a 49% discount to current prices according to financial modeling. Morningstar's fair value estimate of $93.00 contrasts with this, but the disparity underscores the market's cautious stance on Uber's long-term profitability.

Long-Term Growth: Beyond EVs and Ride-Hailing

Uber's strategic initiatives extend far beyond EV incentives. The company is expanding its delivery ecosystem, with Uber Eats revenue growing from $12.1 billion in 2023 to $13.7 billion in 2024. New ventures, such as a partnership with Sally Beauty for beauty delivery, are projected to add $1 billion in revenue by 2026 according to market forecasts.

Technological innovation is another pillar. Uber is accelerating AV development through partnerships with WeRide, NVIDIA, and Momenta, with self-driving taxis slated for Texas by late 2025. Additionally, R&D expenses of $3.134 billion for the twelve months ending March 2025 highlight its commitment to innovation according to financial reports. International expansion, including taxi partnerships and services like "Uber for Teens," further diversifies its revenue streams according to company strategy.

Is Now the Time to Buy?

The interplay of undervaluation and long-term growth potential creates a compelling case for investors. Uber's current P/E and PEG ratios suggest it is trading below its intrinsic value, while its strategic pivot toward delivery, AVs, and sustainability positions it for multi-year growth. However, risks persist: regulatory scrutiny, competitive pressures in delivery, and the uncertain profitability of AVs could temper expectations.

For value-oriented investors, Uber's stock appears attractive at current levels. The DCF analysis implies a 49% upside potential, and the consensus analyst target of $110.60 suggests a 45% re-rating from the current price. While short-term volatility is likely, the company's diversified growth initiatives and cost discipline make it a high-conviction opportunity for those with a 3–5 year horizon.