Investing.com -- Oppenheimer analysts identified Uber Technologies, Inc. (NYSE:UBER) as a top large-cap pick for 2025, emphasizing the current market environment as a buying opportunity.
Despite a recent 23% drop in Uber's share price since earnings—compared to the NASDAQ's 4% gain—the firm maintains an "Outperform" rating with a price target of $85.
Concerns surrounding robotaxis and U.S. ride growth have weighed on Uber's stock, but Oppenheimer views these as overblown.
"US ride growth concerns and Robotaxi have created an attractive buying opportunity," said the firm.
They highlighted Uber's strong fundamentals, including a forecasted 17% revenue and 30% EBITDA compound annual growth rate (CAGR) from 2024 to 2026.
Oppenheimer sees Uber benefiting both in the near and long term.
"UBER should retake lost US Mobility share upon grandfathering higher insurance costs one quarter before LYFT and more aggressive incentives," adds Oppenheimer.
In a future where multiple robotaxi providers coexist, they believe Uber's leading logistics platform positions it to thrive with higher utilization and a lower cost-to-serve model.
While the promise of robotaxis has captured investor attention, Oppenheimer outlined several hurdles, including high fleet costs of $15 billion to $40 billion upfront, vehicle downtime due to maintenance, and infrastructure expansion needs.
"We highlight 15 questions/challenges related to Robotaxi," the note reads, casting doubt on bullish cost assumptions.
Nevertheless, the analysts argue that robotaxis could expand Uber's total addressable market (TAM) by encouraging deeper penetration into consumer car expenses, which currently make up only 2% of Uber's U.S. mobility revenues.
"Even if the ~20% take-rate fell to 10%, the business would be >2x larger, and compares to 13%-15% for online travel," the firm said.
Oppenheimer's $85 price target reflects a valuation of 16x FY26 EBITDA, suggesting significant upside potential from current levels.