Needham Expresses Bullishness On US Ride-Share Industry; Uber Remains On Conviction List

  • Needham analyst Bernie Mcternan forecasted a 24% 3-year CAGR for U.S. ride-share bookings through 2025, down from the 45% CAGR in the three years heading into the pandemic.
  • Company data, industry reports, and a proprietary survey of 500+ U.S. consumers supported the forecast.
  • He had a more bullish view of the U.S. ride-share industry, causing him to increase the estimates for Lyft, Inc LYFT and conviction in Uber Technologies, Inc UBER reaching its 2024E bookings guidance.
  • Also Read: Uber Resumes Ridesharing In Some Cities, Makes It More Attractive
  • UBER remains his choice for Needham's Conviction List as he liked its balance of growth and profitability. He had a Buy on Uber with a price target of $50.
  • He remained Hold-rated on LYFT due to concerns over necessary investment levels for driver supply.
  • The survey indicated price sensitivity and low frequency, leading to a high churn risk. 
  • He noted that the power users were modestly less price-sensitive than lower frequency users.
  • Price Action: UBER shares traded higher by 0.16% at $21.80 on the last check Wednesday.
  • Photo via Wikimedia Commons
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