Uber and Lyft Report Earnings This Week. What to Expect.

By Eric J. Savitza

Updated Feb. 2, 2021 7:43 am ET / Original Feb. 1, 2021 6:20 pm ET

Uber and Lyft are scheduled to announce their fourth-quarter earnings results later this week.

Hollie Adams/Bloomberg

Investors jumped into ride-sharing stocks on Monday as a pair of analysts raised their expectations for both Uber and Lyft ahead of their coming December quarter earnings reports.

Lyft (ticker: LYFT) will report financial results on Feb. 9, with Uber (UBER) scheduled to announce one day later.

The two stocks are widely expected to see a pickup in both ridership and investor interest later in the year as the economy shows more signs of recovering from the pandemic and more people travel for both work and pleasure.

Cowen analyst John Bleckledge reiterated his Outperform ratings on both companies on Monday, increasing his Uber target to $64 from $58, while taking his Lyft target to $56 from $49. Barclays analyst Ross Sandler maintains his Overweight rating on Uber shares, increasing his target to $57 from $50, while keeping Lyft at Equal Weight but with a new target of $49, up from $40.

Uber’s substantial presence in the food delivery business is a clear distinction between the two companies. Blackledge expects fourth-quarter gross bookings to be down about 1% from a year ago, with a 46% decline in the “mobility” business offset by 125% growth in food delivery. 

“Our Outperform rating is based on Uber’s differentiated position due to its global scale and market leadership in diverse app-coordinated transportation and logistics businesses,” Blackledge wrote in a research note. He estimated that the core ride-sharing business is already profitable on a per-trip basis. He said Uber is  “poised to continue to gain and retain share in multiple fast-growing geographies and adjacent spaces.”

Barclays analyst Sandler wrote that Uber’s food-delivery business is “on fire and at the forefront of investors conversations,” due in no small measure to the well-received recent DoorDash IPO and the closing of the Postmates acquisition. Sandler views Uber as the “best hybrid name to own here, benefitting from the re-opening and Uber Eats approaching breakeven.”

On Lyft, Blackledge is cautious on the quarter, projecting revenue of $560 million, down 45% from a year ago and a hair below consensus on lower ride volumes. Looking past “near term choppiness,” he wrote, Lyft’s valuation looks attractive, given the growth in the “transportation as a service” market. He said survey data finds younger riders more inclined to use Lyft, and that they may choose to avoid public transportation as the pandemic impact lingers. “

Sandler thinks that Lyft will benefit as vaccines roll out “and could outpace Uber in rides for a few quarters.” But he also noted fourth-quarter results could be affected by incremental costs by the passage of Proposition 22 in California, which added some new rider benefits, as well as incremental costs for the company’s nascent delivery business.

On Monday, Uber was up 3.6%, to $52.76, while Lyft was up 2.4%, to $45.51.