Shares of Lyft are down more than 20% for the week as investors finally got their first look inside its rival’s business, Uber. The stock is on track to close in the negative four out of five days this week and drop $3 billion in market capitalization.
The stock started the week priced at $74.45 from last Friday’s close, above its IPO price of $72. As of Friday morning, shares traded around $58 with a market capitalization of about $17 billion.
Lyft continued to plunge more than 4% on Friday after Uber released its S-1 where it reported 2018 revenue of $11.27 billion compared to Lyft’s $2.2 billion. Uber said it posted a net profit of $997 million in 2018, thought it has a loss of $1.85 billion on an adjusted EBITDA basis. Lyft reported a loss of $911 million in its public filing.
Still, investors are still uncertain of how to compare the two stocks. Besides the different components of their businesses, with Uber investing in its freight and meal delivery services on top of ridesharing, their financials are difficult to stack up.
Wedbush Securities analysts gave Lyft a neutral rating on Friday with a 12-month price target of $80, saying concern they’ve heard from investors prior to Uber’s S-1 are not eased much now that it’s public.
“And now that Uber’s S-1 was released after the close yesterday we think investors don’t yet have a whole lot more clarity on some of the key comparable metrics,” the analysts wrote. “Uber does not break out its metrics between the US and international beyond noting that 52% of bookings and 74% of rides come from outside the US. Additionally, Uber defines its rider metrics by combining both rideshare and Uber Eats riders, so generating metrics like billings per ride, revenue per ride and profit per ride are not fully comparable.”
The analysts tried to approximate how the two compare, saying Uber’s “ridesharing take rate,” defined as revenue over gross bookings, was 22% in 2018 compared to Lyft’s 26%. But they noted that Uber includes tolls and surcharges in gross bookings, unlike Lyft and Uber’s numbers were global, which suggests a larger spread of its range.
“We believe there could be continued pressure on Lyft shares while investors wait for Uber’s roadshow and dig further into the full financial metrics,” Wedbush analysts wrote. “In our opinion, the battle for market share will be balanced going forward. We think there’s plenty of work to do and time to go until investors start to feel like they are missing out on the ‘next Amazon’ although we believe Lyft remains in a strong position to capitalize on this fertile market opportunity.”