Consumers are not cutting back on drive-hailing services. Uber (UBER) posted strong ride-hailing revenue, up by 82% Y/Y to $4.14 billion. Its delivery business is healthy.
Uber reported a 21% rise in delivery revenue, to $2.93 billion. In Q1, it expects bookings to grow by 20% to 24% from last year to $31 billion to $32 billion. The firm shows no sign of a slowdown from a recession. Growth investors should watch or buy UBER stock.
Lyft (LYFT) warned that its Q1 results would not meet expectations. It expects revenue of $975 million, below the average $1.1 billion analyst estimate. Adjusted EBITDA of between $5 million and $15 million is very low. The company is struggling because it cannot compete effectively against Uber.
Lyft is not locating passengers as efficiently as Uber. As the disposable income of its core demographic worsens, competition between Uber and Lyft will intensify. Customers have higher credit card costs, higher rent, and higher food costs. They may cut their budget, limiting ride-sharing usage first.
Uber benefits if Lyft’s business breaks down. In addition, it is diversified with a food delivery business. Uber is an attractive growth investment. Consider waiting for a better entry point before buying UBER stock.
