Uber beats Lyft for bikers and drivers, analysts say
Uber Technologies Inc. appears to be outperforming its smaller competitor, Lyft Inc., as ridesharing companies try to roll their businesses back from pandemic lows, some analysts say.
As the two companies prepare to release their third quarter financial results, analyst data points to increased spending on Uber UBER,
– which also has a delivery activity – that Lyft LYFT,
and the incentives offered by both companies to drivers appear to have been more beneficial for Uber.
RBC Capital Markets analysts say Uber delivers passengers to their destinations faster and more cheaply than Lyft.
“Uber’s more proactive investments in providing drivers could pay off, which could result in a loss of shares for Lyft,” RBC’s Brad Erickson wrote in a note to investors.
Stifel analysts cited data from Apptopia that showed fewer downloads and sessions of the Lyft app compared to the Uber app, for both passengers and drivers. According to this data, total Uber downloads topped pre-pandemic levels and increased 14% year over year, while Lyft downloads continued to lag behind levels. before the pandemic and declined 12% year over year.
And analysts at Bernstein wrote that their route tracking and driver app metrics suggest Uber is recovering faster than Lyft.
Still, both companies will benefit from the economic reopening, said Tom White, analyst for DA Davidson. Noting that Lyft’s user base is “differentiated” because the company has tried to distance itself from Uber, whose early reputation discouraged customers, he said that “this reactivation of customers will be a significant test of the strength and loyalty of the Lyft brand “.
Lyft is expected to release its results Tuesday afternoon, with Uber expected to follow Thursday afternoon. Here’s what to expect.
What to expect from Uber
Earnings: According to FactSet, analysts on average expect Uber to post a loss of 34 cents per share, or $ 677 million. Estimize, which collects expectations from analysts, hedge fund managers, executives and more, expects the company to post a loss of 27 cents per share.
Returned: Analysts on average expect revenue of $ 4.41 billion, according to FactSet. Estimize is targeting $ 4.39 billion.
Movement of stock: Uber stock has fallen after posting earnings in two of the past four quarters and five of the 10 reports it has released since its release. Uber shares have fallen nearly 14% so far this year through Friday’s session, while the S&P 500 index has gained nearly 23%.
What to expect from Lyft
Earnings: FactSet says analysts on average expect Lyft to post a loss of 2 cents per share, or $ 201 million. Estimize expects the company to post earnings of 10 cents per share.
Returned: Analysts on average expect revenue of $ 862.4 million, according to FactSet. Estimize is targeting $ 898.5 million.
Movement of stock: Lyft shares fell after reporting earnings in two of the past four quarters and six of the 10 reports it has issued since its IPO. The stock is down about 6.4% so far this year through Friday’s session, while the S&P 500 Index has gained nearly 23%.
What Else Analysts Say
In September, Uber announced that it expected adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) to be between a loss of $ 25 million and a gain of $ 25 million for the third quarter, and raised its outlook. gross bookings.
Mark Shmulik, Bernstein analyst, on Uber: “We think [gross bookings] will gradually increase in the fourth quarter, as suggested by competitor forecasts and seasonality. Regarding margins, we believe that the delivery was the main source of the improvement of Uber’s EBITDA guide in [September]. “
Mark Mahaney, Evercore ISI analyst, on Uber: “We believe the recent investments in the company’s subscription business and new vertical expansion will prove more resilient demand trends amid a full mobility recovery. .
Youssef Squali, analyst at Truist, on Lyft: “Although the recovery in demand varies by market, the supply of drivers remains a problem nationwide, which has led to unsustainable prices and downtimes. longer waits, in our opinion. We expect to see this trend improve and with it lower incentives for drivers and better unit profitability, leading the company to sustained profitability in [the second half of 2021] and beyond.”
Mark Shmulik, Bernstein analyst, on Lyft: “User growth is already showing signs of slowing growth, if growth in engagement (rides / user) or pricing power does not materialize, LYFT’s earnings prospects may decline. “
Of the 45 analysts surveyed by FactSet, 36 have a buy rating on Uber stock, while four have a hold rating, 1 says sell and four rate the stock overweight. The average price target on Friday was $ 66.96.
Of the 37 analysts surveyed by FactSet, 25 have a buy rating on Lyft stock, three rate the stock overweight, 12 have a hold rating and one says sell. The average price target on Friday was $ 70.79.