Uber, Lyft Stocks Surge on Strong Projections

Uber and Lyft, the giants of the ride-hailing industry, saw their stocks soar to record highs on Wednesday, with Uber hitting its highest price ever and Lyft experiencing its best single-day percentage gain ever. The surge came after both companies announced strong financial projections, but Wall Street appears more bullish on Uber’s future than Lyft’s.

Uber’s stock rose as much as 12% to $77.99 following the company’s announcement that it expects higher-than-forecasted earnings growth over the next three years. Additionally, Uber revealed plans for $7 billion of share buybacks, its first since going public in 2019. This news propelled Uber’s market capitalization to $159 billion, making it significantly more valuable than Lyft, which has a market cap of $7 billion.

Lyft, on the other hand, saw its stock price jump as much as 37% to $16.77 after reporting quarterly earnings that exceeded analyst estimates. The company also provided robust guidance for 2024, projecting its first ever year of positive cash flow. Despite this positive momentum, Lyft’s stock remains about 75% below its 2019 high.

The combined market capitalization of Uber and Lyft increased by about $18 billion on Wednesday, with Uber accounting for $16.3 billion of the total. This widening gap in valuation between the two rivals contrasts with their relative positions at the time of their 2019 initial public offerings, when Lyft was valued at $24 billion and Uber at around $80 billion.

While both companies enjoyed a surge in their stock prices, Lyft’s day could have been even better. Following its earnings release on Tuesday, Lyft’s stock initially surged by as much as 60% in limited trading. However, this was short-lived, as the gains quickly retreated after it was discovered that a typo had inflated the company’s projected earnings margin growth for 2024. Despite this distraction, analysts remain positive about Lyft’s performance.

The positive momentum in the ride-hailing industry also benefited DoorDash, which saw its stock rise 3% amid broader market gains. This comes after a recent selloff, with the S&P 500 and Nasdaq gaining about 0.6% and 0.8%, respectively. Despite the positive market conditions, DoorDash, along with Airbnb and Spotify, remains more than 30% below its 2021 peak.

The surge in stock prices for Uber and Lyft comes amid ongoing challenges for the ride-hailing industry, including protests by drivers demanding more stable and better pay. Thousands of DoorDash, Lyft, and Uber drivers went on strike on Wednesday at cities and airports across the U.S., highlighting the ongoing tension between gig economy workers and the companies they work for.

Overall, Wednesday was a historic day for Uber and Lyft, with both companies experiencing significant gains in their stock prices. While Uber appears to be in a stronger position than Lyft according to Wall Street, both companies are optimistic about their future financial performance.