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Earnings Outlook: Nearly two years into the pandemic, Uber and Lyft still looking for a consistent lane

Nearly two years into the COVID-19 pandemic, the ride-hailing industry is still seeking stability.

Uber Technologies Inc. UBER, +7.27% and Lyft Inc. LYFT, +3.63% are scheduled to release fourth-quarter results next week that should show how the companies are dealing with a continuously changing ride-hailing environment. Lyft will report Tuesday afternoon, and Uber follows on Wednesday.

Analyst data showed continued recovery in rides and travel at the end of 2021, although U.S. ride-hailing volume still appeared to be down about 40% over the past two years, according to an analysis by YipitData, whose information is based on email receipts. Year over year, analysts at Raymond James & Associates who cited company and third-party app data estimate that Uber fourth-quarter ride bookings rose 54%, while Lyft’s daily active users grew 41%.

Regardless of the actual rides numbers, analysts will be looking for what the companies say about driver supply, which had improved in the third quarter but may have been affected by the COVID-19 omicron surge in the fourth quarter and into the new year. Both Uber and Lyft had offered drivers incentives during the pandemic, but said they were reducing or stopping those incentives.

Uber will also be affected by the changing status of food delivery, with growth appearing to slow there, at least according to some analyst data. Uber’s Eats division helped the company when demand for rides plummeted because of lockdowns and has grown into a business whose revenue has exceeded that of its rides business, so analysts will be watching what Uber says about how slowing delivery growth may affect the company’s bottom line. Despite a slowdown in growth, though, Truist Securities analysts expect Eats gross bookings to outdo rides bookings again in 2022.

What to expect from Uber

Earnings: According to FactSet, analysts on average expect Uber to post an adjusted loss of 30 cents a share. Estimize, which gathers estimates from analysts, hedge-fund managers, executives and others, expects the company to post a loss of 20 cents a share.

Revenue: Analysts on average expect revenue of $5.35 billion, according to FactSet. Estimize is guiding for $5.41 billion.

Stock movement: Uber stock has fallen after reporting earnings in two of the past four quarters, and five of the 11 reports it has made since going public. Uber shares are down 4.7% so far this year through Friday’s session, while the S&P 500 index  SPX, +0.52% has lost 5.2%.

What to expect from Lyft

Earnings: According to FactSet, analysts on average expect Lyft to post adjusted earnings of 8 cents a share. Estimize expects earnings of 8 cents a share as well.

Revenue: Analysts on average expect revenue of $940.1 million, according to FactSet. Estimize guidance is $944.4 million.

Stock movement: Lyft stock has fallen after reporting earnings in two of the past four quarters, and six of the 11 reports it has made since going public. Lyft shares have fallen 4.9% so far this year through Friday.

What analysts are saying

Analysts are mostly bullish on ride-hailing, although they are more optimistic about Uber and slightly less so about Lyft.

“We expect [Uber] to show sustained positive adjusted Ebitda in 4Q21 after achieving [Ebitda] profitability in 3Q21,” Truist analysts wrote. Likewise, they expect Lyft to maintain positive Ebitda in the fourth quarter, following its report of positive Ebitda in the second and third quarters of 2021.

Raymond James analysts said they expect “solid overall bookings for Uber in part due to acquisitions over the last year and expect [mid- to high-] teens growth in 2022.” They said they saw slower sequential growth in bookings for Lyft in the fourth quarter.

And Mizuho Securities analysts, who rate Uber as a “top reopening play,” said they expect driver supply to improve and for Uber’s Eats business to hold its own against DoorDash. In addition, they wrote: “We anticipate a positive regulatory resolution for gig labor issues at the state level as [New York] and [Massachusetts] are likely to track similar to Proposition 22 in [California].” 

Out of 38 analysts surveyed by FactSet, 32 have a buy rating on Uber stock, while four have a hold rating, and two rate the stock at overweight. The average price target as of Friday was $67.36. 

Out of 34 analysts surveyed by FactSet, 19 have a buy rating on Lyft stock, 11 have a hold rating, three say sell and one rates the stock at overweight. The average price target as of Friday was $64.79. 

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