Uber stock (NYSE: UBER UBER ) has fallen by close to 11% since early February after the WHO declared the Coronavirus a global health emergency, while Lyft LYFT stock (NASDAQ NDAQ : LYFT) has fared worse and lost roughly 22% of its value. The spread of the pandemic has had a negative impact on the ride-sharing market, as people are increasingly confined to their homes through lockdowns while remaining apprehensive about sharing rides with strangers. While Uber has outperformed through the pandemic thus far, likely due to its Uber Eats food delivery business and its better exposure to international markets, we believe that Lyft could be a better investment due to its stronger financial performance and relatively cheaper valuation.
Our detailed dashboard analysis Is Uber Technologies Expensive Or Cheap vs. Lyft? compares trends in key financial metrics for the two companies over the years to determine their relative valuations under the current circumstances. We summarize parts of this analysis below.
Why Has Uber Outperformed Lyft Over Recent Weeks?
Uber’s P/S based on 2019 revenue has increased from over 3.8x in 2019 to 4x currently, while Lyft’s multiple has declined from 3.5x to about 3x. The increase in Uber’s P/S multiple can be attributed partly to its Uber Eats food delivery business, which should see demand hold-up better through the current pandemic, as people skip eating out at restaurants and increasingly order in.
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