1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
Jacob Maslow
Jacob Maslow
Articles (187)  | Author's Website |

What to Expect From Uber's IPO

Investors should remain concerned that the company may never be profitable and is experiencing slowing growth

April 15, 2019 | About:

Uber’s filing for an initial public offering on the New York Stock Exchange has the rideshare company preparing to enter the stock exchange under the UBER ticker.

Lyft Inc. (NASDAQ:LYFT) went public on March 29, and while a smaller company than Uber, does provide insight into how its rival’s IPO may go for investors.

Lyft’s IPO was like many others, with an initially high value that dropped over the first two weeks of trading.

The company’s stock closed its first day of trading at $78.29 a share and stood at $58.46 a share in morning trading on April 12. Lyft’s stock fell more than 20% over the past week and is down from the IPO price of $72 a share.

Uber and Lyft are two very different companies in terms of size and revenue, but, according to the company’s public filing, Uber suffered higher losses. Uber generated $11.27 billion in revenue in 2018 versus Lyft’s $2.2 billion. Uber also posted a net earnings before interest, taxes, depreciation and amortization loss of $1.85 billion, while Lyft’s net loss was $911 million.

Uber’s offering is expected to be much higher than Lyft’s as valuation estimates range between $90 billion and $120 billion.

Like Lyft, initial purchases on the day the company goes public will likely fuel gains over the IPO price before cooling off. 

Uber’s stock may face the same trajectory, especially with the company remaining unprofitable. The company has a lot of headwinds, so while it is investing overseas and employees are even using a visa program to work, profits remain a concern.

Growth is slowing for Uber, and the company’s IPO filing claims operating expenses are expected to “increase significantly for the foreseeable future.” The company also cautioned it may never be able to achieve profitability.

The company’s rapid growth over the past three years has also slowed as competition increased, investigations into a data breach and even the purchase of Grab continue. Uber’s future on the stock exchange will put pressure on the company to turn a profit, and this may prove to be too difficult.

Disclosure: The author does not have any stakes in the listed equities.

Read more here:

Not a Premium Member of GuruFocus? Sign up for a free 7-day trial here.

About the author:

Jacob Maslow

Jacob Maslow is a writer who began his career as a payroll manager. The same affinity for numbers that originally led him to an early career in accounting now comes in handy when it comes to understanding and working with marketing analytics.

A native of New York, Maslow is now based in the Middle East, where he lives with his wife and five children and provides high-quality services to clients in a variety of industries, including the legal, medical and financial sectors.

In addition to his marketing and consulting work, Maslow has founded a variety of news websites, including Legal Scoops. He is a frequent contributor to a variety of publications.

Visit Jacob Maslow's Website

Rating: 0.0/5 (0 votes)


Please leave your comment:

Performances of the stocks mentioned by Jacob Maslow

User Generated Screeners

pascal.van.garsseHigh FCF-M2
kosalmmuseBest one1
DBrizanall 2019Feb26
kosalmmuseBest one
DBrizanall 2019Feb25
MsDale*52-Week Low
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat