No Lyft for Uber shares after results fall short
Shares of Uber Inc fell 10% in early trading on Friday after the ride-hailing service missed most Wall Street targets in its quarterly earnings report, in sharp contrast to upbeat numbers from U.S. rival Lyft Inc a day earlier, reports Trend referring to Reuters.
None of the Wall Street brokerages who cover the stock changed their recommendation on Uber, and the fall was almost equivalent to the 8% surge in the company’s shares after Lyft’s numbers on Thursday.
Revenue at the company, however, grew just 14% compared to an almost 150% jump in costs, leaving the firm with a more than $5 billion loss, its biggest ever.
“In a nutshell, there were many puts and takes in the quarter but overall we would characterize this print/guidance as a B performance with the Street expecting an A+ coming off its recent IPO,” Wedbush analysts said.
Until the broader market turbulence of the past week, Uber shares were recovering solidly from a rough start to their life on the New York Stock Exchange.
That reflected continuing doubts over the solidity of the company’s long-term business model. But of the 33 brokerages now covering the stock, 21 have “buy” or higher ratings, 11 are on “hold” and just one has a “sell” rating.
On Friday, two reduced their price target for the stock while another two raised.
Several brokerages pointed to comments by Chief Executive Officer Dara Khosrowshahi that the price war in the ride-hailing business was easing and that both Lyft and Uber were laying out a path to future profits.
“Near term, bears pointing to the ‘chicken and the egg’ problem (profits or growth?) – may carry the day... but we like bulls’ chances longer term as they took another step on the path to profitability,” Evercore analysts said.