As the ride-sharing rivals get ready to report first-quarter earnings, traders are finding it difficult to pick favorites between the two stocks with their underlying businesses at risk amid the widespread economic slowdown.
Lyft is scheduled to report on Wednesday afternoon, a day before Uber.
"I think it's going to be a very, very long time before either one of these companies sees any kind of a pickup," Boris Schlossberg, managing director of FX strategy at BK Asset Management, told CNBC's "Trading Nation" on Friday.
Analysts at Citi Research resumed coverage on Lyft with a buy rating on Friday despite its recent underperformance versus Uber, saying they had a positive long-term outlook for the company's "pure-play" North America-focused business.
"I think the relative valuation argument on Lyft is actually very, very weak because Lyft's exposure to the North American market, in my opinion, actually makes it much more vulnerable," Schlossberg said. "I think North Americans, not having experienced any kind of serious pandemic, [are] going to be much more squeamish about getting back into ride sharing."
Uber, however, has some notable advantages, Schlossberg said.
"Uber, with Uber Eats, has really carved out a very interesting, unique business ... of on-demand transport of goods rather than people," he said. "So, in my opinion, Uber, which is obviously the global dominant brand, is actually also a dominant brand here because of its ability to do other business than just simply transport people. So, to me, in the argument of Uber vs. Lyft, neither one of them is a great trade at this point, but I prefer Uber over Lyft."
Craig Johnson, senior technical research analyst at Piper Sandler, favors Uber.
"I have to agree with Boris on this one," Johnson said in the same "Trading Nation" interview, adding that he noticed "something very similar" occurring in both stocks' technical charts.
"On the Lyft chart, the longer-term trend is still down, and clearly there's been a very large sell-off in the shares" followed by a relief rally, Johnson said.
"That's the key phrase: 'the relief rally.' It looks like, to me, ... sort of a bear-market rally in this stock that's already been in a downtrend," he said. "From my perspective, I'm taking the profits you've got right now in Lyft."
Uber's stock has a "very similar setup," he added.
"The longer-term trend is still down,' Johnson said, adding that Uber's recent climb also looks a lot like a relief rally.
"It's a relief rally where I'd be taking the profits, stepping aside for now and waiting for these shared-economy stocks to try to come back into vogue, which probably isn't going to happen over the near term here," he said.
Lyft shares fell nearly 10% in Friday's trading session, closing at $29.60. The company announced plans to lay off 17% of its workforce and furlough nearly 300 others because of coronavirus pandemic's impact on its business.
Uber shares slid more than 6% on Friday to close at $28.39.
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May 04, 2020 at 08:25PM
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As Lyft and Uber prepare for earnings, traders pick between the ride-share stocks - CNBC
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