UBER VS. LYFT: A NEVER-ENDING MARKET COMPETITION

Uber Vs Lyft

Uber Technologies Inc, (Uber) went public on May 10, 2019 at $45 per share. At the IPO price, the ride-hailing company was valued at $82.4 billion. The IPO only raised $8.1 billion. Uber technologies include, Rides, Eats, Freight, Bets and Advanced Technologies Group. The stock is trading at $36.59 on NYSE. The stock dropped 1.32 percent on June 09, 2020. Currently, Uber has market capital of $63.4 billion. The stock has 52-week low of $13.71 and high of $47.08. Uber has beta of 1.0 which correlates with market movement. The company is scheduled to report next earnings on August 06, 2020. Analysts have average price target of $39.82 for the stock which indicates 8.83 percent upside from its current price. The stock has 63.24 percent institutional ownership and 2.81 percent shorts.

Lyft Inc. (Lyft) went public on March 28, 2020 at a $72 per share. At the IPO price, the Lyft initial public offering put forward 32.5 million shares. The company was valued more than $20 billion. The stock is trading at $39.21 on NASDAQ. The stock dropped 4.32 percent on June 09, 2020. The company currently has market capital of $11.7 billion. Unlike Uber, Lyft only offers ride hailing servicing; connecting passengers with drivers. The stock has 52-week low of $14.562 and high of $68.33. The company is scheduled to report next earnings on August 05, 2020. The stock has beta of 1.4 which is almost one and half percent volatile compared with Uber. Analysts have average price target of $41.95, which indicates 6.99 percent upside. The stock has 62.30 percent institutional ownership and 9.18 percent shorts.

Uber vs. Lyft: At its IPO price, Uber’s market capital was more than 4 times Lyft. Currently, Uber’s market capital is more than 5 times Lyft’s market capital. Uber is relatively closer to its 52-week high, while Lyft is trading almost at its half of IPO price. Both stocks have between 62-63 percent institutional ownership, an indicator most investors look into while investing in a stock. Uber has Beta of 1, while Lyft has Beta of 1.4, which indicates that Lyft is more volatile compared to Uber. Uber only has 2.81 percent shorts, while Lyft is one of the most shorted stocks with almost 9.20 percent shorts. Lyft’s biggest Shareholder is Rakuten Inc. with shares worth of $1.9 billion; Rakuten is a Japanese electronic commerce and online retailing company based in Tokyo. Uber’s biggest shareholder is SB Investment Advisors; a large advisory firm with discretionary assets under management worth of over $113 billion. SB investment has $6.2 billion worth of Uber shares at its current price.  

In their last quarterly report, Uber had 14.33 percent increase in revenue year over year, with loss of $2.94 billion, while Lyft had 23.15 percent increase in revenue year over year with loss of $398 million. With the current pace of losses, Uber is more vulnerable if a second wave of corona virus returns in fall.

Since last month, shares of Uber are up 15.58 percent, while Lyft is up 27.87 percent. The volatility with market going up has paid off for Lyft. In the meantime, if the stock market takes a turn, Lyft will have more losses compared with Uber. Uber has employed more than 26,000 staff for its operation, while Lyft only has employed around 5600 staff. With recent lay-offs Uber tries to mitigate the situation and cut the losses since the ride-hailing is down over 70 percent. Eighty-three percent of analysts recommends buying Uber and only two percent recommends selling the stock. On the other hand, Lyft has only sixty-three percent buy recommendation with zero percent sell.

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