As an investor in Uber (UBER) and short in (LYFT) – both of which reported earnings in the last couple days – it’s a trade that keeps on paying. That’s because UBER is superior to LYFT on every metric. The divergence in their stock price performance that you can see in the chart above is therefore justified and likely to continue.
UBER reported 24% Gross Bookings for Mobility and Delivery growth to $34 billion in its 3Q23 announced Tuesday morning. LYFT reported 15% Gross Bookings growth for its 3Q23 announced Wednesday afternoon. (Note: I’m excluding UBER’s Freight segment and LYFT only has mobility, not delivery (i.e. food)). That resulted in 11% revenue growth for UBER and 10% for LYFT. UBER’s Adjusted EBITDA was $1092 million versus $92 million for LYFT. Adjusted EBITDA Margins were 12% for UBER and 8% for LYFT. In other words, even though it is 10x larger, UBER is growing faster than LYFT. In addition, more of the revenue it takes in falls to the bottom line as measured by Adjusted EBITDA Margin. That is: it’s more profitable. The only advantage LYFT has is that it’s slightly cheaper on a Price / Adjusted EBITDA measure.
When you crunch the numbers, it’s hard to make a case for owning LYFT. UBER – on the other hand – will be one of the great stocks of the next decade IMO.
Disclosure: Top Gun is long shares of UBER and short LYFT calls.