Uber Stock Is a Buy: But You'll Have to Watch It Closely

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demand.10 stocks we like better than Uber Technologies ›Uber (NYSE: UBER) stock looks attractive based on its recent financial performance. Not only is its growth accelerating, but the company is generating heaps of cash and is buying back tons of its stock. Even more, the tech stock's valuation looks borderline cheap in relation to its stellar growth profile.Understanding the investment case for Uber is easy. The company matches riders and couriers with drivers and merchants across its mobility (rides) and delivery (food and grocery) marketplaces. Scale in this lucrative platform-based business model brings cost leverage and a growing stream of cash that management reinvests in its business, while also leaving plenty left over for share repurchases.But there is a catch that investors cannot ignore: There are some significant threats to its business in the autonomous vehicle space, including Alphabet's Waymo and electric-car maker Tesla (NASDAQ: TSLA). Both companies have autonomous vehicle initiatives that, if scaled quickly, could disrupt Uber's business.Image source: Getty Images.Uber's latest quarterly results highlight the company's staggering momentum. Trips booked on its platform during the quarter grew 22% year over year -- an acceleration from 18% growth in the second quarter. This helped gross bookings increase 21% and revenue rise 20% -- both faster than the prior quarter's 17% to 18% pace, respectively.Best of all, the company's cash-cow business generated free cash flow of $2.2 billion for the quarter, with trailing-twelve-month free cash flow reaching $8.7 billion, https://app.tikr.com/stock/financials?cid=144524848&tid=610379350&tab=cf&ref=ckr6tl, capturing the platform's ability to convert gross bookings into cash.Management expects the company's business trajectory and profitability to remain healthy in the holiday period. Fourth-quarter guidance calls for 17% to 21% gross bookings growth and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $2.41 billion and $2.51 billion, implying continued margin improvement versus last year.And the company is putting cash to work. In August, Uber boosted its share repurchase program by $20 billion -- a move that management said reflects its confidence in its business. Since then, repurchases have ramped up, with $4.6 billion of repurchases year to date compared with about $700 million for the same period last year.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,749.08 -101.84 (-1.49%)Dow 3047,601.91 -652.91 (-1.35%)Nasdaq22,897.48 -508.98 (-2.17%)Russell 20002,386.65 -64.15 (-2.62%)VIX20.72 +3.21 (+18.28%)Gold4,161.40 -52.20 (-1.24%)PortfolioSign in to access your portfolioSign inTop gainersONDS Ondas Holdings Inc. 6.61 +1.09 (+19.89%)CLBT Cellebrite DI Ltd. 19.17 +3.20 (+20.04%)SEE Sealed Air Corporation 42.89 +6.50 (+17.88%)FLY Firefly Aerospace Inc. 21.21 +2.90 (+15.84%)TTEK Tetra Tech, Inc. 37.69 +5.24 (+16.13%)Top losersBTDR Bitdeer Technologies Group 11.17 -2.77 (-19.91%)BE Bloom Energy Corporation 101.76 -24.96 (-19.70%)FRMI Fermi Inc. 17.74 -4.02 (-18.46%)VIA Via Transportation, Inc. 42.44 -8.06 (-15.95%)FLNC Fluence Energy, Inc. 16.35 -2.86 (-14.89%)Most activeONDS Ondas Holdings Inc. 6.61 +1.09 (+19.89%)OPEN Opendoor Technologies Inc. 8.99 -0.39 (-4.11%)NVDA NVIDIA Corporation 186.07 -7.74 (-3.99%)PLUG Plug Power Inc. 2.4750 -0.2550 (-9.32%)TSLA Tesla, Inc. 402.68 -27.92 (-6.48%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBTC-USD Bitcoin USD 98,726.65 -2,306.02 (-2.28%)TSLA Tesla, Inc. 402.11 -28.49 (-6.62%)NVVE Nuvve Holding Corp. 0.5125 +0.3563 (+228.11%)^IXIC NASDAQ Composite 22,898.05 -508.41 (-2.17%)ETH-USD Ethereum USD 3,208.86 -168.75 (-5.00%)Top economic events