Uber Stock Is Down 12% in Just 3 Months. Time to Buy?

Shares of ride-hailing and delivery specialist Uber Technologies (NYSE: UBER) have had a tough run lately. Over the last three months, the stock has tumbled about 12%, leaving shares trading at around $74 as of this writing -- far off its 52-week high of $101.99.

A pullback like this in a dominant, cash-cow tech platform probably has many investors wondering if it's a rare chance to buy shares at a discount. After all, Uber's underlying financials are arguably stronger than ever.

But is this really a buying opportunity? Or is the market appropriately repricing the stock to reflect a more uncertain operating environment ahead?

Image source: Uber.

Impressive growth

Uber's fourth quarter shows more of the same strong growth it's been serving up to investors: a market-leading ride-sharing and delivery company growing rapidly and generating tons of cash. Uber's fourth-quarter gross bookings rose 22% year over year to $54.1 billion, translating to strong top-line performance, with revenue climbing 20% year over year to $14.4 billion.

The company's monthly active platform consumers rose 18% year over year to 202 million, highlighting the growing global adoption of the company's platform.

Additionally, Uber's non-generally accepted accounting principles (non-GAAP) operating income jumped 46% year over year to $1.9 billion. And the company continued producing huge sums of cash, with free cash flow for the period coming in at $2.8 billion -- up 65% year over year. And for the full year, free cash flow rose 42% year over year to $9.8 billion.

And management expects demand for its platform to continue growing rapidly.

For the first quarter of 2026, Uber guided for gross bookings to grow 17% to 21% year over year on a constant-currency basis.

The autonomous threat

With the core business firing on all cylinders, why are shares sliding?

The problem is the looming threat of autonomous driving.

Investors are growing increasingly concerned that self-driving networks could disrupt Uber's driver-reliant business model. If deep-pocketed tech companies successfully scale their own autonomous ride-hailing fleets, they could undercut Uber on price and steal market share.

Competitors are already making headway. Alphabet's Waymo is operating fully autonomous ride-hailing services in multiple major U.S. cities, and Tesla continues to lean heavily into its own robotaxi ambitions.

Of course, autonomy could also be a massive catalyst for Uber.

The company already has the largest global demand network for ride-hailing. If Uber can successfully transition its platform to route autonomous vehicles (AV) -- rather than just human drivers -- it could dramatically reduce its costs and expand its profit margins.

"Having learned from our AV deployments thus far, we are even more convinced that AVs will unlock a multi-trillion dollar opportunity for Uber," explained CEO Dara Khosrowshahi during the company's fourth-quarter earnings call. "Autonomy fundamentally amplifies the strengths of our existing platform: global scale, deep demand density, sophisticated marketplace technology, and decades of experience matching millions of trips in real time."

In fact, just this morning, Amazon's autonomous driving company Zoox announced a partnership with Uber to deploy its autonomous vehicles on the Uber platform.

"The partnership is planned to launch in Las Vegas this summer and in Los Angeles by mid-2027," Uber said in a press release on Wednesday. "The Zoox robotaxis will be available through the Uber app."

But this transition is still in its infancy, and the ultimate economics of a scaled autonomous ride-sharing network remain unproven.

Time to buy?

Despite the stock's recent pullback, shares still trade at a multiple that requires strong execution. As of this writing, Uber's forward price-to-earnings ratio sits at about 22. At a valuation like this, the market is assuming that Uber can maintain its dominant market share and continue growing its bottom line for years to come without being derailed by robotaxis.

But the fast-changing competitive landscape introduces a significant wildcard. Ultimately, the stock will likely trade at a lower valuation as long as there is significant uncertainty regarding how the autonomous-driving transition will unfold.

With all of this said, the stock's valuation may have fully priced in these risks, leaving shares attractive today. For investors with a high risk tolerance, starting a small position in the stock now could make sense -- but a company in a fast-changing industry like this will need to be watched closely. If competitive dynamics evolve unfavorably for Uber over time, it may make sense to move on. But if the opposite occurs, adding to the position could make sense (at the right valuation, of course).

Daniel Sparks clients have positions in Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.