Should You Buy Uber Stock Before the Huge Investor Update?

Uber stock is down 19% year-to date in 2026 as the proliferation of driverless car technology increases the risks of downside for Uber investors. The company is scheduled to report quarterly financial results on November 4th, 2026. And investors are asking me if they should buy the stock before the company makes that huge investor update. I'll share with you my answer to that question as well as preview what you should expect from Uber in its upcoming earnings release. I'll also discuss the major factors weighing on the company's valuation and what catalyst, if any, could lift shares of this company higher from here. I want to thank the Mly Fool for sponsoring this video. Visit fool.com/parkkev for the 10 best stocks to buy. Now, >> if we were to look at Uber's business without considering driverless car technology risks, we would be optimistic about its prospects. Gross bookings grew 24% year-over-year to 58 billion. Revenue increased 12% to 14.2 billion. Operating income grew by 30% to 1.9 billion and its cash flow from operations total $2.9 billion. Furthermore, the management team is forecasting more success across these vitally important metrics with gross bookings forecasted at 58 to 60 billion in the upcoming quarter. Additionally, Uber boasts over 28 million monthly active platform customers and that was up 16% year-over-year. I suspect this figure will continue increasing as the convenience Uber adds to its customers both on the ride segment and the food delivery segment is phenomenal. People love the convenience of ordering a ride not feeling like they need to drive in certain cases. For example, if you want to go a night out of drinks with your buddies or your girlfriends, you don't need to worry about who will be the designated driver anymore. You can just take an Uber. Furthermore, if you come home from work and you're tired and you want to order a meal for delivery because you don't want to go to the grocery store and look for all the ingredients and spend the time to cook a meal, you can pay a small fee and have Uber deliver something from one of your favorite restaurants. Those convenience advantages are adding to the significant growth in monthly active platform customers. But of course, we can't neglect the risks from driverless car technology. And coming into 2026, I had my viewpoints of what I expected out of the driverless car industry this year. One of my most strongest convictions for 2026 was that Tesla would again overpromise and underdel. And that forecast has turned out to be true as Tesla has not reached anywhere near the levels of expanding its robo taxi network that it forecasted to begin 2026. So that part of my forecast has come true. However, some things have turned out to be more negative than I expected for Uber in 2026. And one of those is the relationship with Whimo. Now, initially they had partnerships and were content going at this market together. However, as the year progressed, I saw more signs that Whimo was wanting to go at this market alone without partnering with Uber. And that's not a good thing for Uber now, especially because Whimo is way ahead of Tesla in terms of actually delivering robo taxis around the United States. Additionally, the very successful SpaceX IPO means it's more likely that SpaceX and Tesla will merge, which means more likely that Tesla will have more capital to invest in its robo taxing network. And it's going to take a lot of capital. Tesla will need to spend billions, tens of billions of dollars to come anywhere near the level of robo taxi that they're forecasting to investors. And if they merge with SpaceX, that will give the company significantly more capital as SpaceX and the larger company can [snorts] attract more capital from investors and attract more capital from investors with the assumption that this is a future-based business, not to expect any profits or cash flow in the near term. and so they can go full steam ahead and investing in future technology and not being concerned about near-term profits or near-term cash flow. There are still so many unanswered questions about driverless car technology that are mostly political regulatory. How will they implement those regulations? Will it be handsoff? Will regulators say, "All right, you guys go ahead, launch these vehicles, and we'll see how it goes, and then we'll iterate as we move forward." Or will regulators be very restrictive and limit the expansion of driverless cars until they've proven to be extremely safe, much safer than cars driven by humans. Who will bear the burden of insurance cost? who will bear the responsibility in case of the worst case scenario. All of those things are still unanswered. And in my opinion, the way things are going in the United States, it will be a very, very slow and careful and cautious roll out. No regulator, no politician wants to take responsibility for allowing driverless cars on the road. And then should there be a fatality, should there be serious accidents, get blamed for that. I expect the same in Europe as the EU is even slower than the United States and even more layers of bureaucracy in that region. However, in China and in other parts of the world, the roll out of driverless cars is already heading faster than in the United States and in Europe. And I suspect that will continue to be the case. So Uber now because of this risk is trading at its cheapest valuation ever on a forward PE basis. Uber trades at 15. So this is a valuation for a business that's not growing anywhere near the levels that Uber is growing with nowhere near the profitability of Uber and the cash flow of Uber. And so that driverless car risk is weighing on the business. And investors still view this as a one-sided risk. They don't see any potential in Uber benefiting from this technology by investing in it itself, partnering with further manufacturers, and bringing this technology onto its platform in addition to the human drivers it already boasts. one thing working in Uber's favor. If it does choose to invest in driverless cars itself, which it's already trying with partnerships with Riven and Lucid, it's already ordered cars from these providers. One thing working in its favor is there is a massive overupp manufacturing available. And this situation has gotten even worse over the previous 6 to 8 years as Chinese car manufacturers have significantly expanded their manufacturing capacity on top of a situation that was already an overs supplied industry. So overall we've got around the world about manufacturing capacity of about 130 to 135 million units annually. whereas consumers worldwide are purchasing maybe 100 million units of vehicles annually. So there's a glut of capacity available. If Uber wanted to say purchase 100,000 vehicles, 500,000 vehicles from a certain supplier or multiple suppliers, it can get very attractive terms to purchase those units for its own fleet. That's one thing working in Uber's favor. and then it can license the driverless car technology from one of the many manufacturers that are also investing in developing this technology. So today I also updated my fair value estimate of Uber and I now feel the business is worth $122 per share and its current market price is 66. It's one of the most undervalued stocks I see in the marketplace but it's also one of the riskier. It's got this imminent threat overhanging, staying over its head, and it's unlikely to go away anytime soon. In fact, the situation is likely to get worse before it gets better. Uber's business is already worth more than what it's selling for. But what Uber needs to do in order for the share price to reach closer to its intrinsic value is reduce the perceived risk. They need to work on that risk of driverless car technology. They need to develop plans of their own. They don't necessarily need to implement those plans, but they need to create plans of their own that they could implement in the event of widespread regulatory approval of driverless car technology. They can partner with manufacturers to purchase for their own fleet. they can reach agreements with some of the existing players in the industry. Even if those terms are unfavorable to Uber, maybe they can offer better terms to Whimo in order to extend that partnership because just the perception the reduce the reducing of the perception of driverless car technology killing its business will already benefit shareholders. even if the actual terms of the agreement aren't so beneficial for shareholders and I think Uber has a lot of options that it can undertake but I think there's a lot of uncertainty and so they don't want to make any certain decision and certainly not uh inform investors and widely publicize that decision because of the competitive implications of such a decision. So, to answer the question, should you buy Uber before the company makes the investor update? I think that depends on if you already own Uber or not. If you don't already own Uber, then I I think it's a great buy before earnings. However, if you already own Uber, then it's reasonable to wait until after the company announces these earnings if you're interested in adding to your position because you're already exposed to the upside in the event of a major announcement or a major beat in forecasts or revenue or profits for the next year or the next quarter that beats expectations. I own Uber myself and I'm not interested in adding any more before earnings, but I could be interested in adding more after earnings. Again, I have this ranked as one of the top 10 stocks you can buy right now.