Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Uber Or Lyft: Which Should You Pick?

By (Sam Quirke )Stock MarketsJul 06, 2021 06:38AM ET
Uber Or Lyft: Which Should You Pick?
By (Sam Quirke )   |  Jul 06, 2021 06:38AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

There can be no doubt that the likes of Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) have changed the ride-hailing and taxi industry forever. Their technology has disrupted one of the world’s oldest and most constant industries and it looks like it’s only going to continue doing so. For investors keen to get some exposure to that kind of technology, Uber and Lyft offer similar but still fundamentally different opportunities. Let’s take a look at the pros and cons of each.

On the one hand, we have Uber, who have cemented their position as the first mover and market leader to the extent that they reached the holy grail of brand marketing - their company name became a verb in and of itself. Despite seeing their shares take the guts of a 70% tumble last year as COVID kept most of the world’s population at home, investors who held or even bought in at the lows have had quite the journey since.

Post-Pandemic Landscape

Uber managed to ride the tech recovery wave all through last summer and found new fuel from the reopening play that came online towards the end of last year. Their shares hit an all time high this past February to cap off a staggering 350% run from the lows of 2020. They’ve since given some of that back but have been consolidating in recent weeks and look keen to get going again.

Wells Fargo (NYSE:WFC) added them to their Signature Picks list last month while Melvin Capital recently initiated a fresh position in Uber. The company’s Q1 numbers had revenue down only 10% on the year with EPS only $0.06 away from a positive print. The company’s long term potential has been leaned on by many in the bull camp, who see Uber coming out of the pandemic with more strings to its bow than when it went into it. Evercore ISI went so far as to reiterate their Outperform rating on the stock two weeks ago, while also calling them “the clear leader”.

Up and Comer

If Uber is the clear leader, then Lyft is definitely coming in at a close second. In fact, on a short term view they’re actually pulling ahead by some margin. Since last November, Lyft’s shares have tacked on 145% while Uber’s are only up 40%. One of the big drivers behind this outperformance has been the company’s numbers, which show that Lyft is very much in growth mode while Uber could be said to be in consolidation mode.

Lyft’s management offered some informal upside guidance with their Q1 report which came as a nice surprise. They’re expecting revenue of $680-700 million versus a consensus of $683 million, while their contribution margin for Q2 is also expected to be an all time high at around 57%. This means the company is on track to come very close to hitting profitability.

Evercore has an Outperform rating on Lyft as well, and their $77 price target suggests there’s upside of more than 20% to be had from Friday’s closing price. Technically, both stocks have an RSI that’s in an attractive uptrend which suggests there’s decent momentum on the bid right now, which means investors weighing up the options have plenty to chew on.

LYFT Inc Stock Chart
LYFT Inc Stock Chart

Getting Involved

On the one hand, Uber is by far and away the heavyweight of the two, boasting almost 5x Lyft’s market cap. But their shares are undoubtedly moving more sluggishly, perhaps as a direct result. Lyft can claim to be carrying the most momentum right now, but it has a few gaps in its portfolio, for example, food delivery, that might hold it back over the long run.

They’ll both have to contend with Didi Global (NYSE:DIDI), China’s biggest ride-hailing app which started trading in New York last week via ADRs. However, tough it has an impressive $75 billion market cap, it’s already coming under regulatory scrutiny from the top dogs in China which makes it probably a little too much of a risk for any non-meme stock investors right now. It’s still very much a two-horse race on these shores, with not a whole lot to dislike between them.

Uber Inc Stock Chart
Uber Inc Stock Chart

Original Post

Uber Or Lyft: Which Should You Pick?

Related Articles

Uber Or Lyft: Which Should You Pick?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email