Which Rideshare stock has the most upside potential in 2025? News ad

Rideshare or ride-hailing has become mainstream and an integral part of the lives of many commuters. In the US there is a duopoly between Uber Technologies Inc. New York Stock Exchange: UBER And Lyft Inc. NASDAQ: LYFTwhile the market share is divided approximately 76% to Uber and 24% to Lyft. While Uber’s dominance is evident in its stock fundamentals, Lyft is starting to gain momentum thanks to its new CEO David Risher, who also bought another 13,800 shares on November 15, 2024.

Both Uber and Lyft operate in the computer and technology sector, not the transportation sector as many investors may believe. The vehicles do not belong to them. Instead, they operate their mobile application platform that connects and facilitates the driver experience with drivers on their respective networks. Uber shares are trading up 17.8% YTD (YTD), while Lyft shares are trading up 14.84% YTD. In 2025, investors may be wondering which of these two stocks may have more growth potential. Let’s see.

Uber: the undisputed king of ridesharing and more

A pioneer in the ride-sharing industry, Uber Technologies has become so popular and synonymous with ride-hailing through a mobile app that its name itself has become a verb. “Ubering” to a specific location involves calling an Uber driver through the app to take you there. Ten years later, the company finally became profitable. Uber is intended to be a multi-modal app with various modes of transport, as well as e-bikes and e-scooters, taxis and public transport through its app. Uber has also expanded into food delivery with its Uber Eats service, which has exploded in popularity during the COVID-19 pandemic.

Outstanding results, but overall order growth appears to be slowing

Uber’s third-quarter 2024 earnings report raised some concerns about the company’s growth trajectory after it missed expectations for gross bookings. Uber reported third-quarter earnings per share of $1.20, beating the consensus estimate by 37 cents. Revenue rose 20.4% YoY to $11.19 billion, beating consensus estimates of $10.99 billion.

Total orders grew 16% year over year, or 20% in constant currency, to $41 billion. Delivery orders grew 17%, or 24% in constant currency, year-over-year to $18.7 billion. . Trip volume for the quarter grew 17% year over year to 2.9 billion, or nearly 31 million trips per day. Operating cash flow was $2.2 billion and free cash flow was $2.1 billion. The company repurchased shares for $375 million. Uber ended the quarter with $9.1 billion in cash and cash equivalents and expects to pay off $2 billion in outstanding debt by the end of the year.

Uber forecast for 2024

Uber expects total bookings to grow 16% to 20% in constant currency for all of 2024, to between $42.75 billion and $44.25 billion. Travel growth is expected to remain around 17% YoY.

Uber expects an exchange rate deceleration of 2% in annual growth and 5% in annual Mobility growth.

Uber Chief Financial Officer Prashant Mahendra-Raja commented: “We achieved another major milestone this quarter, delivering GAAP operating income of more than $1 billion for the first time in our company history, and are on track to achieve 20 percent growth in total bookings in constant exchange rates. for the whole year.”

Lyft: Underdog strengthens position against ‘Goliath’ Uber

Lyft has become an outsider in the taxi industry. The company is improving its performance and adding new products under the leadership of its new CEO, David Richer. In 2024, Lyft added 33 new products and features.

Price Lock is a $2.99 ​​per month feature that allows passengers to lock in prices for scheduled and regular trips. This innovation has resulted in over 200,000 active passes, with Price Lock users taking an average of four additional trips per month.

Innovation and efficiency drive third quarter results

Lyft reported third-quarter 2024 earnings per share of 29 cents, beating the consensus estimate by 10 cents. Revenue jumped 31.6% YoY to $1.52 billion, beating consensus estimates of $1.44 billion. Total orders rose 16% YoY to $4.1 billion. Adjusted EBITDA rose to $107.3 ​​million compared to $92 million in the same period last year. Active passenger numbers grew 9% year-on-year to 24.4 million. Operating cash flow jumped to $264 million from $2.3 million in the same period last year. Free cash flow increased to $242.8 million from minus $30 million last year.

Lyft Forecast for 2024

In the fourth quarter of 2024, Lyft increased gross bookings 15% to 17% year over year, or from $4.28 billion to $4.35 billion.

Adjusted EBITDA is expected to be between $100 million and $105 million, and Adjusted EBITDA margin is expected to be between 2.3% and 2.4%.

Free cash flow will exceed $650 million. Total order volume will increase by 17% year on year.

Adjusted EBITDA margin will be 2.3%, compared to the previous forecast of 2.1%.

AVs and DoorDash Partnership

Active passengers reached a new record of 24.4 million, up 9% year-on-year. Trip volume also reached a new record of 217 million, up 16% year-on-year. Lyft will partner with Mobile Global Inc. NASDAQ: MBLIMay Mobility and Nexar to connect drivers to autonomous vehicles. In 2025, Atlanta drivers will be able to order autonomous vehicles for their trips. Lyft partners with DoorDash Inc. NASDAQ: DASH offer exclusive benefits to trips that link their DashPass accounts.

Before you consider Lyft, you’ll want to hear this.

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While Lyft currently has a Hold rating among analysts, the top-rated analysts think these five stocks are Strong Buys.

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