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DA Davidson Analyst: Choice Between Uber, Lyft Is Easy

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DA Davidson Analyst: Choice Between Uber, Lyft Is Easy

The battle of public ride-hailing companies begins Friday when Uber becomes a public company. Should investors stick with the larger Uber or opt for rival Lyft Inc (NASDAQ: LYFT)?

What Happened

D.A. Davidson senior research analyst Tom White told CNBC during a recent "Trading Nation" segment there will be a clear winner: Lyft.

The holder of the smaller market share in the U.S. market is the company that's seeing all the momentum, the analyst said. 

Over the last two years, Lyft has grown its market share from 22 percent to 39 percent as it tries to position itself as the "kindler, gentler Uber," he said. 

"Brands are something that investors get uncomfortable with; they're hard to value, but in Lyft's case we think that's been an important driver of the share gains."

Why It's Important

Uber's larger presence does give it a better chance of showing superior margin growth, and this would be "reasonable to expect" in the near-term, the analyst said. Yet Uber's revenue trends are "a lot less impressive" compared to Lyft's, highlighted by slowdowns in revenue growth and deterioration of profitability, he said. 

What's Next

Lyft has plenty of runways ahead to grow its domestic business and take market share from Uber, which is too busy focusing on "a lot of places on a lot of fronts," White said. 

Related Links:

Opinion | The Risks Facing Uber Ahead Of Its IPO

Riders, Revenue And Growth: What Analysts Say About Lyft's Q1 Earnings

Latest Ratings for LYFT

DateFirmActionFromTo
Jun 2019Initiates Coverage OnOutperform
Jun 2019UpgradesNeutralPositive
Jun 2019Initiates Coverage OnHold

View More Analyst Ratings for LYFT
View the Latest Analyst Ratings

Posted-In: CNBC DA Davidson ride hailing Tom White Trading NationAnalyst Color Analyst Ratings Media Best of Benzinga

 

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