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Lyft vs. Uber: Which Stock is the Better Buy After Earnings?
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With the recovery of ride-hailing still upon us, Lyft (LYFT - Free Report) ) and Uber Technologies (UBER - Free Report) ) are still at the beginning stages of being publicly traded companies and both stocks could have plenty of potential for 2023 and beyond.
This poses the question, which gig economy stock is the better buy following their fourth-quarter earnings? Taking a look at their Q4 reports and outlook should help get a better answer as both Uber and Lyft strive for profitability.
Lyft Q4 Review
Shares of Lyft dropped more than 30% following its grim fourth-quarter report last Thursday to the surprise of many. At the forefront, Lyft missed earnings estimates by a mile with EPS at -$0.75 compared to expectations of $0.10 a share.
The loss was mainly attributed to Lyft strengthening its insurance reserves which accrued $375 million in operating costs under the company’s current liabilities.
Image Source: Zacks Investment Research
Going forward Lyft advised the SEC has prompted the company to include its insurance reserves on its non-GAAP financial calculations which attributed to the miss on its bottom line as this adjustment was not part of the company’s Q4 guidance prior to the change.
Still, Lyft highlighted that it achieved the highest quarterly revenues in company history during Q4 beating top-line expectations by 1.5% with sales at $1.17 billion and up 21% year over year.
Image Source: Zacks Investment Research
Uber Q4 Review
Uber reported Q4 earnings last Wednesday and posted a nice surprise on its bottom line. Uber significantly beat earnings expectations with EPS at $0.29 compared to the -$0.21 per share that was expected.
Sales also came in 1.3% above top-line expectations at $8.60 billion, up 49% Year over year. The quarter was highlighted as Uber’s strongest ever which capped off the strongest year for the company as well according to CEO Dara Khosrowshahi.
Image Source: Zacks Investment Research
The stellar quarterly results were attributed to gross bookings which were up 19% year over year to $30.7 billion. More impressively, revenue growth still outpaced Uber’s gross bookings with the company stating its looks poised for another record year in 2023.
Image Source: Zacks Investment Research
Guidance & EPS Growth
For its fiscal year 2023 first quarter, Lyft was able to give revenue guidance of $975 million which was below the company’s previous forecast by about $200 million and below Wall Street’s expectations of $1.09 billion. LYFT also expects adjusted EBITDA to be between $5 million and $15 million in Q1.
The weaker guidance escalated the sell-off following Lyft’s Q4 report. However, year over year Lyft’s earnings are now forecasted to climb to $0.79 per share in FY23 compared to EPS of -$1.50 in 2022, based on Zacks estimates. Fiscal 2024 earnings are projected to climb another 80% to $1.43 a share as displayed in the chart below.
Image Source: Zacks Investment Research
Pivoting to Uber, the company’s guidance anticipated gross bookings to grow 20% to 24% YoY during Q1 or $31 billion to $32 billion with adjusted EBITDA of $600 million to $700 million.
Despite Uber’s stronger guidance earnings are still expected to be in the red in FY23 at -$0.27 per share although this would be up from EPS of -$4.65 last year. Fiscal 2024 is expected to be profitable with earnings projected to jump to $0.59 per share, based on Zacks estimates.
Image Source: Zacks Investment Research
Performance & Valuation
Year to date, Uber stock is now up +40% to largely outperform Lyft’s -4% and the S&P 500’s +8%. Over the last three years, Uber’s -12% drop has still topped Lyft’s -78% decline with both stocks underperforming the benchmark as they continued to give back early gains from their 2019 IPO’s.
Image Source: Zacks Investment Research
The traditional P/E valuation is not a valid metric to use for Lyft and Uber stock as they are still on the path to profitability. With that being said, price to sales remains a good metric to monitor the premium being paid for both stocks.
On that note, trading around $10 per share Lyft’s P/S of 0.9X is more attractive than Uber’s 2.1X and the stock trades at $34 a share. Lyft’s price to sales is also lower than the Internet-Services Industry average of 1.5X.
Image Source: Zacks Investment Research
Takeaway
Although Uber and especially Lyft stock have given back their gains since going public they are still intriguing growth investments. Lyft’s guidance during Q4 was certainly disappointing but the company is expected to be above the profitability line in 2023.
Plus, earnings estimates started to trend higher again for Lyft’s fiscal 2024 over the last two months with LYFT stock still sporting a Zacks Rank #2 (Buy).
On the other hand, Uber stock lands a Zacks Rank #3 (Hold). Uber is not expected to be profitable in 2023 despite its more impressive guidance and better-than-expected outlook which could lead to more near-term upside in the stock. However, it’s important to note that earnings estimates have slightly gone down for FY24 its first expected year of profitability.
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Lyft vs. Uber: Which Stock is the Better Buy After Earnings?
With the recovery of ride-hailing still upon us, Lyft (LYFT - Free Report) ) and Uber Technologies (UBER - Free Report) ) are still at the beginning stages of being publicly traded companies and both stocks could have plenty of potential for 2023 and beyond.
This poses the question, which gig economy stock is the better buy following their fourth-quarter earnings? Taking a look at their Q4 reports and outlook should help get a better answer as both Uber and Lyft strive for profitability.
Lyft Q4 Review
Shares of Lyft dropped more than 30% following its grim fourth-quarter report last Thursday to the surprise of many. At the forefront, Lyft missed earnings estimates by a mile with EPS at -$0.75 compared to expectations of $0.10 a share.
The loss was mainly attributed to Lyft strengthening its insurance reserves which accrued $375 million in operating costs under the company’s current liabilities.
Image Source: Zacks Investment Research
Going forward Lyft advised the SEC has prompted the company to include its insurance reserves on its non-GAAP financial calculations which attributed to the miss on its bottom line as this adjustment was not part of the company’s Q4 guidance prior to the change.
Still, Lyft highlighted that it achieved the highest quarterly revenues in company history during Q4 beating top-line expectations by 1.5% with sales at $1.17 billion and up 21% year over year.
Image Source: Zacks Investment Research
Uber Q4 Review
Uber reported Q4 earnings last Wednesday and posted a nice surprise on its bottom line. Uber significantly beat earnings expectations with EPS at $0.29 compared to the -$0.21 per share that was expected.
Sales also came in 1.3% above top-line expectations at $8.60 billion, up 49% Year over year. The quarter was highlighted as Uber’s strongest ever which capped off the strongest year for the company as well according to CEO Dara Khosrowshahi.
Image Source: Zacks Investment Research
The stellar quarterly results were attributed to gross bookings which were up 19% year over year to $30.7 billion. More impressively, revenue growth still outpaced Uber’s gross bookings with the company stating its looks poised for another record year in 2023.
Image Source: Zacks Investment Research
Guidance & EPS Growth
For its fiscal year 2023 first quarter, Lyft was able to give revenue guidance of $975 million which was below the company’s previous forecast by about $200 million and below Wall Street’s expectations of $1.09 billion. LYFT also expects adjusted EBITDA to be between $5 million and $15 million in Q1.
The weaker guidance escalated the sell-off following Lyft’s Q4 report. However, year over year Lyft’s earnings are now forecasted to climb to $0.79 per share in FY23 compared to EPS of -$1.50 in 2022, based on Zacks estimates. Fiscal 2024 earnings are projected to climb another 80% to $1.43 a share as displayed in the chart below.
Image Source: Zacks Investment Research
Pivoting to Uber, the company’s guidance anticipated gross bookings to grow 20% to 24% YoY during Q1 or $31 billion to $32 billion with adjusted EBITDA of $600 million to $700 million.
Despite Uber’s stronger guidance earnings are still expected to be in the red in FY23 at -$0.27 per share although this would be up from EPS of -$4.65 last year. Fiscal 2024 is expected to be profitable with earnings projected to jump to $0.59 per share, based on Zacks estimates.
Image Source: Zacks Investment Research
Performance & Valuation
Year to date, Uber stock is now up +40% to largely outperform Lyft’s -4% and the S&P 500’s +8%. Over the last three years, Uber’s -12% drop has still topped Lyft’s -78% decline with both stocks underperforming the benchmark as they continued to give back early gains from their 2019 IPO’s.
Image Source: Zacks Investment Research
The traditional P/E valuation is not a valid metric to use for Lyft and Uber stock as they are still on the path to profitability. With that being said, price to sales remains a good metric to monitor the premium being paid for both stocks.
On that note, trading around $10 per share Lyft’s P/S of 0.9X is more attractive than Uber’s 2.1X and the stock trades at $34 a share. Lyft’s price to sales is also lower than the Internet-Services Industry average of 1.5X.
Image Source: Zacks Investment Research
Takeaway
Although Uber and especially Lyft stock have given back their gains since going public they are still intriguing growth investments. Lyft’s guidance during Q4 was certainly disappointing but the company is expected to be above the profitability line in 2023.
Plus, earnings estimates started to trend higher again for Lyft’s fiscal 2024 over the last two months with LYFT stock still sporting a Zacks Rank #2 (Buy).
On the other hand, Uber stock lands a Zacks Rank #3 (Hold). Uber is not expected to be profitable in 2023 despite its more impressive guidance and better-than-expected outlook which could lead to more near-term upside in the stock. However, it’s important to note that earnings estimates have slightly gone down for FY24 its first expected year of profitability.