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Lyft and Uber are expected to release their earnings reports this week. Which one of them will weather the COVID-19 storm? At the time of writing, their stocks are in red.
Share ride companies Lyft Inc (NASDAQ: LYFT) and Uber Technologies Inc (NYSE: UBER) are set to release their earnings this week. Many traders, investors, and pundits are having a hard time trying to choose between both stocks. The COVID-19 pandemic has worsened things as well.
Their underlying business model seems to have issues at the moment. With a higher operating risk than normal, the ride-share business seems to be a model that many expect to disappear.
While we will have to wait on that, we would have to deal with the after-effects of both earnings reports this week.
Lyft and Uber Set to Release Earnings this Week
Lyft will release its earnings report on Wednesday while Uber will do so on Thursday. This 24-hour difference might not do much to the stock prices of both companies.
Lyft (LYFT) stock price is $26.86, −$2.74 (9.27%). This is less than half the $53.94 high that held sway in February. Added to this is Lyfts’ exposure to the North American market. This exposure may lead to weakened demand further down the line. Post-COVID-19, Americans may not be keen on ride-shares.
Meanwhile, Uber may have a deeper insight into the ride-share market. Firstly, Uber is in other markets besides North America where ride-shares have become an essential part of society. Post COVID-19 this aspect of Uber’s business will be critical to its resurgence.
Secondly, Uber has implemented some interesting ideas. Uber Eats is one of the other ideas that Uber has going on.
Thirdly, Uber’s operating profits will come from several special business units. This is in comparison to Lyft which has fewer business units.
Uber Wins on Innovation
Innovation might just be the differentiating factor between the two. Uber it appears is winning the hearts of many on this. The stock prices of the two companies are facing similar difficulties at this time. Uber stock price is $27.19, -$1.20 . This is down from a high of $40 in February. Uber has struggled to stage a comeback. Many believe that innovation is critical for Uber at this time.
On the technical side, the stock prices of both companies are retreating from the deep end. This retreat is temporary. Pundits expect the ride-share companies’ stock prices to continue dipping. This may continue until the COVID-19 situation abates.
In the long run, it seems like most people regard ride-sharing as a fad. When ride-sharing companies like Uber and Lyft entered into the transport space, people hailed their models. They seemed to be the next best thing after a hot pizza. These days, they don’t seem to have much use. This is because virtually everyone is at home.
Things may change soon. Once a vaccine is found and things get back to normal. So, Lyft and Ubers’ story isn’t over just yet. For now, though, both stock prices will continue to go through twists and turns.