It's going to be 'very tough' for Lyft to catch Uber. Here's why.
On today's installment of Good Buy or Goodbye, host Julie Hyman is joined by BD8 Capital Partners, LLC, CEO and CIO Barbara Doran to discuss her investment outlook in the rideshare space. Doran recommends Uber (UBER) as a stock to buy, emphasizing its dominant market position and diversified business model. She notes, "they are just growing their share," currently at 76%, with its closest competitor, Lyft (LYFT), at just 23% of the rideshare market. Furthermore, Doran points out that Tesla's (TSLA) Cybercab unveil at its Robotaxi Day event suggests competition for autonomous driving isn't an imminent threat, as it will be "hard for them to catch up." She also highlights Uber's strong financial position, citing profitability, free cash flow of $1.7 billion, and a $7 billion share buyback authorization. The primary risk she identifies is a potential slowdown in consumer spending. On the other hand, Doran advises avoiding Lyft stock. She notes the company's lower profitability and significantly smaller scale compared to Uber, stating it's "going to be very tough" for Lyft to achieve Uber's current market status. Additionally, she points out Lyft's high debt-to-equity ratio, resulting in a weak balance sheet. Lyft stock also consistently underperforms its main competitor, Uber. However, Doran acknowledges one positive aspect: Lyft's new management team, which could drive continued improvement. To watch more expert insights and analysis on the latest market action, check out more Market Domination here. This post was written by Angel Smith
