I’m persevering with my mini collection on studying S1s (IPO paperwork). We’re having fun with an IPO bonanza this 12 months, so we’d as properly use it for some good and study one thing.
When an organization recordsdata for an IPO, I wish to assume if there’s a publicly traded firm that appears loads like that firm and in that case, I lik to run some numbers evaluating the 2.
Nicely we’ve that precise state of affairs with Uber submitting to go public final week. Right here is Uber’s S1.
We will examine Uber’s numbers to lately public Lyft, which I blogged about earlier on this S1 Enjoyable collection.
Listed here are Uber’s revenue and loss numbers from their S1:
We will examine this to Lyft’s revenue and loss from my prior weblog publish:
I put all of those numbers right into a spreadsheet and added some estimates for 2019 which might be nothing greater than again of envelope guesstimates.
What you’ll be able to see from that is that Uber is 4-5x bigger than Lyft, rising much more slowly, has barely higher gross margins, and each are nonetheless dropping some huge cash however each are shifting in the direction of getting worthwhile on operations in just a few years.
Lastly lets have a look at market valuations. Lyft is at present buying and selling at a market cap of $17bn. For those who say that Uber is 4-5x bigger than Lyft, then Uber should be price within the vary of $70bn to $85bn.
There are different elements that shall be in play when Uber finally costs their IPO and trades. Uber owns minority pursuits in numerous different ridesharing companies that could possibly be price as a lot as $10bn of further worth. Then again, Lyft is rising extra rapidly than Uber.
Finally we are going to see how the market values Uber. However from this evaluation, and the general public market comparables from Lyft, we will see that Uber needs to be price fairly a bit when it goes public.