Lyft vs Uber Stock: 8 Facts to Consider Before Buying
Lyft vs Uber stock, two rivals in the ride-hailing sector, want to transform the industry. Both provide technology to enable individuals to transport others using their vehicles, but they are still different.
Do you consider buying shares of Lyft or Uber? Do you wonder which company has better financial data? Then this article is right for you. We talk about the performance, key financial aspects, profitability and potential.
Lyft vs Uber Stock Price Comparison
The Uber IPO and Lyft IPO were close together in 2019. While Uber had the first trading day, May 10, 2019, Lyft started March 29, 2019. Comparing Lyft vs Uber stock provides a clear picture of investors preference. Both companies currently trader lower than on day one. In the past 12 months, Uber had a dividend-adjusted return of +11.6% while Lyft underperformed with a dividend-adjusted return of -33.5%.
Both companies are part of the technology sector, which may surprises at first since many consider Lyft and Uber to be part of the transportation sector. But they provide the technology to enable independent drivers to start their ride-hailing business using Uber and Lyft’s technologies.
Currently, 14 of 24 analysts consider Lyft as strong, while 22 out of 28 consider Uber a strong buy. The total number of analyst ratings can vary since not every rating company published recommendations for both companies.
Both stocks underperform compared to other sectors and stocks. The value score for Uber and Lyft is close together at 26 (LYFT) and 27 (UBER). Both companies have negative cumulative earnings in the past 12 months and high stock-based compensation for managers and employees. You can compare the quantitative scores relative to the industry (40) and the S&P 500 (73) and notice that both companies have a negative EV/EBITDA.
Lyft vs Uber Financial Data
Let’s look at both companies’ critical financial data by analyzing Uber stocks and Lyft stocks.
Lyft has an operating margin of -54.3%, UBER -36.2%, while the S&P500 companies, on average, have an operating margin of 12.5%. As a result, the net margin is highly negative, and for both stocks, around -50%.
Uber is the clear winner compared to Lyft, looking at the return rates. From 5-day return. 1-month return, YTD returns up to 1-year return, Uber is green while Lyft lost -31.4 since the beginning of this year alone. Both companies do not pay dividends yet.
Short % of Float
Lyft’s short % of float is currently at 11.9%, while Uber is at 3.7%. That means the more investors speculate on prices in Lyft to decrease in the near future. At the same time, that means that a short squeeze can happen if those investors who short Lyft stocks need to cover their short positions if Lyft’s business model leads to a surprisingly positive earnings report.
Both companies were negatively affected during the pandemic since the delivery business, including food delivery business and transportation in North America, became unpopular, which led to a sell off. Uber lost about 65% of its value, declining from about $40 per share to about $15 a share within a month. In the same period, Lyft fell from about $54 to about $16 for a temporary loss of 70%. Meanwhile, Uber nearly recovered to its highs before the pandemic, Lyft doesn’t show such strength yet.
Both daily charts show a consolidation pattern. It needs a strong catalyst to break out of the trading range significantly. The next earnings reports can initiate such movement, and once the upside momentum kicks in again, both stocks become interesting again.
Interestingly, Lyft surprised positively during the last six quarters and has beaten the EPS estimates by over 10% in 5 of 6 cases while Uber provided a mixed picture. Independent from the earning surprises, investors still consider Uber the more healthy stock with the higher potential to win in the long term. One of the reasons might be that both still make losses, but Lyft’s biggest downside is probably the net debt of -$2,374 million with +$2,850 million in cash compared to Uber with net debt of -$3,722 and a cash balance of +$11,313.
Lyft Stock Forecast vs Uber Stock Forecast
Analysts still see potential in both stocks, Uber and Lyft. Ubers stock forecast based on analyst recommendations beats Lyfts. But there is a big potential of rating changes when the ride-hailing business does not recover fast enough. It could result is a downside spiral. Prices are still at a lower end, while the S&P500 went to all-time highs. If the next earning reports are disappointing, then chances increase that analysts will change their rating. Since most analysts are optimistic right now, the next step would be to switch to hold or even to sell, which would initiate another downside movement. So if you wonder is Lyft a good stock to buy, well, it seems that other industries perform better. The uncertainty about the development of the overall economic and health situation puts both stocks under pressure.
Lyft vs Uber Stock Conclusion
Considering to buy Uber or Lyft stock, investors need to notice that other companies and sectors perform better right now. That’s true for the sector and also overall compared to other sectors in the S&P500. It’s hard to predict if this business model can survive and if it can be turned into a profitable business in the current economic environment.
How to Analyze and Trade Shares
Stock research websites are the best place to start researching specific stocks. The best stock research websites allow you to set up alerts for specific news about a company. You could set up an alert with the combination of the company name and the term earnings, for example, “Lyft Earnings.”
As an exchange-listed company, Uber and Lyft might be one of the best stocks to invest in right now. The best stock analysis app can be used for a more extended due diligence process before making the final decision.
You can utilize the best app to buy stocks for buying and selling shares of Lyft and Uber with the preferred number of shares by using the official stock ticker symbol within your trading platform.
Once invested, you can use your brokerage account or one of the best stock tracker to manage your positions within the portfolio.
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