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Uber vs. Lyft: What's the Better Buy?

There are many notable ‘duos’ in the market, a list that includes Uber Technologies (UBER - Free Report) and Lyft (LYFT - Free Report) . Both companies facilitate the same type of service, though UBER’s reach does extend to food delivery and others as well.

Recently, both companies have delivered their respective Q1 results, seeing strong post-earnings reactions so far. But what was there to like in each release? Let’s take a closer look.

Uber Enjoys Big Growth

Uber posted mixed results relative to our consensus headline expectations, with the company crushing the Zacks Consensus EPS estimate by more than 60% but marginally falling short of our sales estimate, reporting sales of $11.5 billion that grew 14% YoY.

The company’s top line continues to grow nicely, as shown below. It’s worth noting that the recent $11.5 billion print reflected its first sequential decline in years.

Zacks Investment Research
Image Source: Zacks Investment Research

Notably, Trips during the period grew an impressive 18% YoY, which was driven by Monthly Active Platform Consumers (MAPCs) growth of 14% year-over-year. Gross bookings also saw 14% growth from the year-ago period, with adjusted EBITDA also seeing an impressive 35% move higher.

All in all, a pretty solid release for the company, with shares initially seeing a muted reaction before moving higher over recent days. Shares have been volatile overall over the past year but have still outperformed relative to the S&P 500, up more than 30%. 

Zacks Investment Research
Image Source: Zacks Investment Research

Lyft Breaks Q1 Rides Record

Lyft shares saw a notably stronger reaction to its release post-earnings relative to UBER, providing some much-needed relief following back-and-forth price action. Now up a modest 0.6% over the last year, Lyft shares have finally found themselves in the green, though the underperformance relative to the S&P 500 remains large.

Zacks Investment Research
Image Source: Zacks Investment Research

Lyft fell short of our headline expectations, with the company missing our consensus EPS estimate by 5% and reporting sales 1% below expectations. Sales grew 14% year-over-year, whereas EPS soared 26% from the year-ago period.

The company’s top line has remained decently strong, loosely mirroring that of UBER, as shown below.

Zacks Investment Research
Image Source: Zacks Investment Research

Concerning the notable highlights, Gross Bookings for Lyft shot 13% higher to $4.2 billion, whereas adjusted EBITDA of $106.5 million crushed the $59.4 million print in the same period last year. Rides for the company grew 16% year-over-year to a record 218.4 million for Q1, with Active Riders also seeing 11% growth from the same period last year.  

Which Stock is a Better Option?

Following their releases, we’ve seen plenty of analyst revisions for both Uber (UBER - Free Report) and Lyft (LYFT - Free Report) . The earnings outlook for UBER remains more constructive, as shown below.

Zacks Investment Research
Image Source: Zacks Investment Research

On the other side, the earnings outlook for LYFT reflects one of bearishness, with analysts dialing back their EPS expectations across several timeframes post-earnings.

Zacks Investment Research
Image Source: Zacks Investment Research

The more robust EPS outlook of Uber is a stronger bet, though it’s worth remembering that Lyft shares have been stuck in limbo over the past year, with the recent results also likely to finally drive some near-term positivity concerning share performance. 


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