Uber expansion into underpenetrated markets could drive growth, analysts say

Jefferies analysts project Uber's geographic expansion into underpenetrated markets could contribute approximately 4% to annual growth through 2030, reaffirming their 'Buy' rating and $100 price target. The firm highlights that lower-tier markets represent only 20% of Uber’s total trips, with significant expansion already underway as the city count grew from 10,000+ exiting 2023 to 15,000+ exiting 2024. While raising 2026 bookings and EBITDA estimates, Jefferies also notes Tesla’s planned robotaxi launch as a potential near-term risk, though they maintain Uber is the most likely consolidator of AV demand.

Analysis

Jefferies' research underscores a significant growth trajectory for Uber Technologies Inc. (UBER) driven by its expansion into underpenetrated geographic markets, which are forecast to contribute approximately 4% to annual growth through 2030. This strategy is already manifesting in operational metrics, with Uber's city count expanding from over 10,000 at the close of 2023 to more than 15,000 by year-end 2024, and further additions anticipated in 2025. The scale of this opportunity is highlighted by the fact that lower-tier markets currently constitute only 20% of Uber's total trips, and even within the mature U.S. market, 45% of consumers still lack access to consistent on-demand services. To support this expansion, Uber is actively working to increase driver supply through targeted incentives, product enhancements like 'Reserve', marketplace technology improvements, and strategic acquisitions, such as that of Denmark's largest taxi operator. Reflecting this positive outlook, Jefferies has increased its 2026 bookings and EBITDA estimates for Uber by 2% and 4% respectively, placing these projections above prevailing Street consensus, and reiterates a 'Buy' rating with a $100 price target, suggesting a 21% potential upside from the current share price. While the long-term penetration of tier 2+ markets is expected to be critically supported by the deployment of low-cost autonomous vehicles (AVs), Jefferies acknowledges Tesla’s planned robotaxi launch on June 12 in Austin as a potential near-term risk, though they maintain confidence in Uber's position as the likely consolidator of AV demand.

Key Decisions for Investors

• Investors should consider Uber's substantial growth potential from its strategic expansion into underpenetrated markets, as reinforced by Jefferies' 4% annual growth contribution projection and a $100 price target.
• It is advisable to monitor Uber's execution on city count expansion, driver supply initiatives, and integration of acquired assets, as these are key indicators of the expansion strategy's success.
• While the long-term outlook, including AV integration, appears robust, investors should be prepared for potential near-term share price volatility associated with competitive developments such as Tesla's robotaxi launch.
• Factor Jefferies' upward revisions to Uber's 2026 bookings and EBITDA estimates, which now exceed consensus, into valuation considerations, as this reflects growing analyst conviction in the company's earnings power.