Uber Technologies, Inc. (NYSE:UBER) is making a bigger push into food delivery and corporate catering. On October 6, the company reported that it had agreed to acquire US catering platform ezCater for $2.3 billion in an all-cash deal. This marks its latest effort to strengthen its delivery business, which is the company’s fastest-growing segment.
For investors, the key question is whether these acquisitions can generate enough additional cash flow to justify their costs while supporting Uber’s long-term growth.
ezCater allows companies to order food from caterers for corporate events, meetings, and workplace meals. The platform generated over $2.5 billion in gross bookings over the past 12 months, growing at a high-teens rate year-over-year. The business is profitable on a non-GAAP operating income basis, and Uber Technologies, Inc. expects the acquisition to be margin accretive.
ezCater also has average order values of more than $400 and a network of more than 140,000 restaurants. Earlier this year, UBER ranked sixth on our list of the Best Revenue Growth Stocks to Buy, but investors looking for more investment opportunities may want to see which five stocks ranked ahead of it.
The deal gives Uber Technologies, Inc. another way to grow its food business beyond traditional restaurant delivery. The company will be looking to combine ezCater’s catering operations with the restaurant network of Uber Eats and the corporate customer base of Uber for Business.
Rosenblatt analyst Scott Devitt noted that the acquisition expands the company’s business-focused segment, where gross bookings grew more than 40% in the second quarter.
Uber’s Growing Acquisition Appetite
The ezCater acquisition comes only months after Uber Technologies, Inc. agreed in July to acquire German company Delivery Hero for $14.8 billion. That agreement is aimed at creating the largest food delivery group outside China.
These two agreements show that the company is using acquisitions to expand both geographically through Delivery Hero and vertically through catering. For a look at how UBER is expanding beyond ride-hailing and positioning itself for growth in delivery and autonomous vehicles, see: Beyond Rides: How Uber Technologies (UBER) Is Building a Global Delivery and AV Powerhouse?
However, the size and pace of these deals raise questions about how efficiently Uber Technologies, Inc. is deploying its capital. The company is paying $2.3 billion in cash for ezCater and so the key question for investors is not simply whether ezCater is a good business, but whether the company is paying an attractive enough price for what it is acquiring.
There are also execution risks. Uber Technologies, Inc. will need to integrate ezCater’s B2B catering platform with Uber Eats and Uber for Business while also trying to maintain ezCater’s relationships with restaurants and corporate customers. The company is also looking to expand internationally through Delivery Hero and both efforts could make execution more difficult, especially if the expected synergies and benefits take longer to materialize.
The acquisition also does little to address one of the larger questions surrounding Uber Technologies, Inc.’s core ride-hailing business. Investors are still concerned about the eventual impact of autonomous vehicles and robotaxis. While the ezCater acquisition gives the company diversification, it does not solve that fundamental question. For a deeper look at this risk, see: Can Uber’s (UBER) Economic Moat Survive the Rise of Robotaxis?
As of October 7, UBER shares were already down more than 17% year-to-date. While the ezCater deal adds another growth and margin opportunity, it is also increasing the company’s reliance on successful M&A execution.
Beyond its expansion plans, investors must also consider whether Uber Technologies, Inc.’s rising insurance costs could put pressure on its cash flow. Read more in “Uber (UBER) Has a Growing Insurance Bill. Is Cash Flow Keeping Up?”
What the Numbers Say
Hedge fund interest in the stock slightly declined during the second quarter. According to Insider Monkey’s database, 151 hedge funds held Uber Technologies, Inc. at the end of the second quarter, down from 153 in the first quarter.
Analyst sentiment, however, remains positive. Of the 54 analysts covering Uber Technologies, Inc., 83% rate the stock a Buy. The median 12-month price target of $100 also implies 46% upside from the stock’s current price as of October 7.
Uber Technologies, Inc.’s valuation looks reasonable rather than obviously cheap as the stock trades at about 15 times trailing earnings and roughly 14 times price-to-free-cash-flow ratio. Those multiples suggest the shares are not excessively valued, although the trailing P/E is partly supported by non-operating investment gains. The price-to-free-cash-flow ratio offers a clearer perspective on Uber’s underlying cash generation.
The company’s improving profitability supports the valuation story. In Q2 2026, Uber Technologies, Inc. reported gross bookings increased 24% year-over-year to $58 billion and adjusted EBITDA rose 33%. Free cash flow increased 13% to $2.8 billion, pushing trailing-12-month free cash flow above $10 billion for the first time. This also gives the company greater flexibility to invest in its business and pursue strategic acquisitions. Overall, Uber’s strong cash generation and reasonable valuation support its investment case, but whether the stock remains attractive will depend on how efficiently the company integrates its acquisitions and converts its expanding delivery business into sustainable profits.
While we acknowledge the risk and potential of UBER as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UBER and that has massive upside potential, check out our report about the cheapest AI stock.
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