Ride-hailing rivals Uber and Lyft will report second-quarter earnings this week. It has been a bumpy road for both stocks leading up to the reports.
Uber stock lost just under 1% to close at 58.48 Monday, slipping further after losing 8.5% last week. Its smaller rival Lyft is faring no better, losing 3.2% to close at 10.57 on the stock market today after losing 10.7% last week.
The shares are sliding amid a market sell-off that has hit tech particularly hard. A weak U.S. monthly jobs report Friday heightened concerns that the U.S. economy is slowing down. That could be especially troubling for companies like Uber and Lyft that rely on discretionary consumer spending.
Meanwhile, both Uber and Lyft shares have already been under pressure this year by concerns about Tesla launching a robotaxi service. Investors fear that Tesla's plan to launch its own app could give both Uber and Lyft a deep-pocketed new rival.
Overall, Uber stock is down 5.5% year-to-date after gaining 150% last year. Lyft stock gained 26% last year but is down 30% so far this year. Here's what to know ahead of both firms' earnings reports:
Uber Stock: What To Watch For Q2
Uber will report second-quarter earnings early Tuesday. Analysts polled by FactSet expect earnings to increase 72% to 31 cents per share. Sales, meanwhile, are seen rising 14.5% to $10.6 billion.
UBS analyst Stephen Ju wrote in a recent client note that "investors should be keenly focused on mobility growth in 2Q24 and beyond, with lingering uncertainty" after Uber missed booking estimates in its previous quarter.
On average, analysts expect Uber's overall bookings value to grow 18% year-over-year to $39.6 billion, according to FactSet. Within that category, analysts expect rides-related bookings to grow 21.2% to $20.3 billion, according to FactSet. Food delivery related bookings are expected to grow 16% to $18 billion.
As far as investor concerns about Tesla's robotaxi, "it seems the AV overhang is here to stay," BofA Securities analyst Justin Post wrote to clients last week.
But he added, "we expect Uber to highlight positive recent events that could aid sentiment."
That includes Tesla delaying its robotaxi event from August to October, Uber's new delivery partnership with Costco, and a recent court win for the company's gig work model in California.
Both UBS and BofA rate Uber stock as a buy.
Lyft Stock Expectations For Q2
Lyft, meanwhile, will report its earnings early Wednesday. The company remains the much smaller challenger to Uber. Lyft is focused strictly in North America and on rides, while Uber has the international and food and grocery delivery businesses.
For Lyft's June quarter, analysts expect adjusted earnings per share to increase 7% to 16 cents, according to FactSet. Sales are forecast to rise 36% to $1.39 billion.
Jefferies analyst John Colantuoni told clients that investors will be looking for upside to Lyft's second-quarter booking and for its earnings before interest, taxes, depreciation, and amortization (EBITDA).
Such upside "will be necessary for the market to gain comfort in Lyft's seemingly aggressive 3-year outlook," Colantuoni wrote in a client note last week. Jefferies has a neutral hold call on Lyft stock.
At an investor event earlier this year, Lyft management told analysts it expects gross bookings to grow at an annual rate of 15% through 2027. The firm also forecast adjusted EBITDA margin of about 4% on a full-year basis in 2027.
Analysts see Lyft's total bookings value growing roughly 18% year-over-year to $4.06 billion for the second quarter, according to FactSet consensus.
What DoorDash Results Mean For Uber Stock
More broadly, Colantuoni said that concerns about softening consumer spending is going to bring more investor focus to earnings growth for the "delivery and mobility" category, which includes Uber, Lyft and DoorDash.
DoorDash reported its second-quarter results late Thursday to a positive response. The company's shares jumped 8% Friday after the company's sales and adjusted earnings beat expectations.
Evercore ISI analyst Mark Mahaney said DoorDash's results gave a positive signal for Uber's food and grocery delivery business. He rates Uber a positive outperform.
"(DoorDash) reported robust consumer demand with strength in restaurant delivery and monthly active user growth in Q2," Mahaney wrote to clients Sunday. "Management has not seen signs of broader macro consumer weakness as US restaurant delivery continues to grow supported by Grocery/Convenience adoption, consistent with our checks suggesting strong Q2 trends."
Uber Stock: Technical Ratings
Coming into trading Monday, Uber stock still held a weak IBD Composite Rating of 42 out of 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one. The best growth stocks have a Composite Rating of 90 or better.
Uber stock's Relative Strength Rating score was 45 out of a best-possible 99. The score puts Uber's 12-month performance in the bottom half of all stocks tracked by IBD.
Lyft, meanwhile, has a Composite Rating of 44 out of 99. Its Relative Strength score is 16 out of 99.
