No Lyft for Uber shares after results fall short

No Lyft for Uber shares after results fall short

FILE PHOTO: A screen displays the company logo for Uber Technologies Inc. on the day of its IPO at
FILE PHOTO: A screen displays the company logo for Uber Technologies Inc on the day of its IPO at the New York Stock Exchange (NYSE) in New York, U.S., May 10, 2019. REUTERS/Brendan McDermid/File Photo

REUTERS: Shares of Uber Inc fell 10 per cent in early trading on Friday after the ride-hailing service missed most Wall Street targets in its quarterly earnings report, in sharp contrast to upbeat numbers from US rival Lyft Inc a day earlier.

None of the Wall Street brokerages who cover the stock changed their recommendation on Uber, and the fall was almost equivalent to the 8 per cent surge in the company's shares after Lyft's numbers on Thursday.

Revenue at the company, however, grew just 14 per cent compared to an almost 150 per cent jump in costs, leaving the firm with a more than US$5 billion loss, its biggest ever.

"In a nutshell, there were many puts and takes in the quarter but overall we would characterise this print/guidance as a B performance with the Street expecting an A+ coming off its recent IPO," Wedbush analysts said.

Until the broader market turbulence of the past week, Uber shares were recovering solidly from a rough start to their life on the New York Stock Exchange.

That reflected continuing doubts over the solidity of the company's long-term business model. But of the 33 brokerages now covering the stock, 21 have "buy" or higher ratings, 11 are on "hold" and just one has a "sell" rating.

On Friday, two reduced their price target for the stock while another two raised.

Several brokerages pointed to comments by Chief Executive Officer Dara Khosrowshahi that the price war in the ride-hailing business was easing and that both Lyft and Uber were laying out a path to future profits.

"Near term, bears pointing to the 'chicken and the egg' problem (profits or growth?) - may carry the day ... but we like bulls' chances longer term as they took another step on the path to profitability," Evercore analysts said.

Source: Reuters

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