Uber Technologies Inc. (NYSE:UBER) shares edged lower on Monday after Melius Research downgraded the stock to Sell from Hold, assigning a $73 price target that points to further downside from the prior close of $81.71. The shares were down about 1.2% in morning trading.
Melius analyst Conor Cunningham said the downgrade was primarily driven by growing competitive risks. Although he recognized Uber’s leading position in global ride-hailing and delivery markets, he warned that this dominance also makes the company more vulnerable as competition intensifies.
“Uber is very clearly the leader in global rideshare and delivery. But given that position, Uber has the most risk from increased competition,” Cunningham wrote. He highlighted autonomous vehicle competition as a key concern, noting that it is expected to accelerate from 2026 onward and could pressure returns regardless of Uber’s partnerships in the space.
Cunningham added that while Uber has positioned itself as a demand aggregator for emerging AV players through investments and strategic partnerships, this approach does not fully shield the company from the risks of a rapidly evolving competitive landscape.
On valuation, the analyst argued that Uber’s shares may appear inexpensive, but current levels assume stable, steady-state growth. He cautioned that any moderation in growth or further standalone expansion announcements from rivals such as Waymo and Tesla in the U.S. market could present downside risks that are not yet fully reflected in the stock price.