DoorDash DASH +3.11% declined to comment, and Lyft couldn’t be reached immediately for comment.
He believes that only being a ride-hailing service is a disadvantage for Lyft relative to Uber Technologies UBER –4.65% (UBER) which has multiple businesses such as Uber Eats. DoorDash plus Lyft essentially creates a mini-Uber.
Uber’s market capitalization is about $53 billon. DoorDash’s market cap is about $26 billion and Lyft’s is about $7 billion.
Lyft gave up a lot of market cap Wednesday. Shares were down about 30% in late trading Wednesday. The S&P 500 and Dow Jones Industrial Average were up 3.1% and 3%, respectively, shortly after an interest-rate decision from the Fed and news that the cental bank isn’t considering lifting borrowing costs in giant increments of 0.75 percentage point.
Guidance did the damage. Lyft said Tuesday it expects second-quarter revenue between $950 million and $1 billion, below analysts estimates for $1.02 billion, according to FactSet. Guidance for adjusted Ebitda was between $10 million and $20 million, nowhere near analysts’ expectations of about $83 million.
Lyft’s earnings report was so surprising that Uber moved up its earnings report and call to Wednesday morning from Wednesday evening. Uber’s results looked a lot better.
Uber is “taking off while Lyft stalls,” wrote Ferragu in a Wednesday report. “Our [investment] thesis is playing out in full: ride-sharing leaders and integrated players [are] set to enjoy superior economics.”
Ride-hailing and delivery have natural synergies, according to the analyst. Drivers stay busier and make more money. That gives Uber a huge advantage. That dynamic actually led him to suggest a DoorDash and Lyft merger as far back as April 2021.
Ferragu doesn’t cover Lyft but he rates Uber stock Buy and has a $60 price target for that stock.
Despite the better earnings result from Uber—guidance for the second quarter exceeded Wall Street estimates—shares were down, falling about 5% in late trading.
DoorDash stock was down about 5.6% before the Fed decision. Shares recovered for a gain of about 3.3% late in the day.
For Uber, it’s tough to call down 5% not so bad when the market is rallying, but the Lyft quarter was such a shock it created big waves for peers.