Proprietary Data Insights
Top Software Application Stock Searches This Month
Up 75% This Year With More Room To Run
It’s the most searched software application stock among investors in Trackstar, blowing away its direct competitor by more than 29,300 views. It has also been one of The Juice’s top stock picks since 2022. And we’re still bullish.
Uber (UBER) doesn’t just generate more investor interest than Lyft (LYFT). It also produces superior returns. YTD, Uber is up approximately 75% compared to Lyft’s meager 3.5% or so increase.
A look back in The Juice’s archives (you can access all past newsletters here) confirms we first suggested buying Uber shares in October, 2002. Since then they’re up nearly 62%. Over the last year, UBER has increased in value by roughly 106%. Over the same periods, LYFT is down about 12% and 9%, respectively.
What made us go with Uber over Lyft? And why did we – so far – turn out to be right?
It comes down to one word – ecosystem.
Uber is aggressively building out an impressive and comprehensive ecosystem. Relative to Uber, Lyft simply is not.
Yes, Uber loses money (a net loss of more than $9.1 billion in 2022 and $157 million in Q1 of this year). However, that doesn’t matter much. And it’s not only because these losses appear on track to decrease as revenue and other growth metrics continue to rise.
It’s also because, as we noted the other day, the stock market is forward looking. Investors value stocks, especially tech stocks, on the basis of what they’re building. On the things they expect them to do tomorrow, based on the groundwork they’re laying today.
Along with another one of our top picks, DoorDash (DASH), which is up about 68% YTD, Uber is following in the footsteps of Amazon.com (AMZN) in two ways.
One, on the ecosystem front, which we’ll expand on in a second. And, two, from the forward-looking valuation perspective.
If you’ve been following tech stocks for more than a minute, you know Amazon bears spent the better part of the last 15 years (or more) decrying the company for its lack of profits. Long-time AMZN bulls laughed all the way to the bank. Because they didn’t value AMZN on traditional profitability metrics (which came along in due time anyway), they valued AMZN on the ecosystem it was building.
Much like Uber.
Like Amazon and now DoorDash, Uber wants to touch consumers in multiple ways, multiple times a week or even day. And they want to touch them in areas that are part of special routines. So it creates partnerships with companies, allowing them to sell their services via the expansive Uber app.
Case in point, a recent deal with Domino’s Pizza (DPZ), making Uber Eats and Uber-owned Postmates, its exclusive third-party delivery partner. Earlier in the year, Uber cut a similar deal with Little Caesars.
There’s no better way to become a part of a consumer’s life than to help them facilitate pizza night. Uber does this sort of thing via partnerships across industries.
There’s so much synergy across the Uber platform.
Between rideshare, Uber Eats and the company’s burgeoning advertising business, each Uber’s different businesses build on one another, working in concert to make its app a one-stop shop for consumers. A lot like Amazon.
If you’re a long-term investor with your foundational bases covered (such as broad market ETF investing and diversification in your favorite sectors), it might make sense to include a handful of non-dividend paying, growth-oriented names with compelling long-term stories. Specifically UBER and DASH. Dollar cost average into these stocks with regular weekly, bi-weekly or monthly investments. Let time and execution do the rest.
Of course, you need a decent appetite for risk and, we stress, a long-term time horizon, because there are no guarantees and there will be missteps along the way.
The Bottom Line: We haven’t seen a more impressive consumer-centric ecosystem in tech since Apple (AAPL) and Amazon. What Uber is doing is truly special. And, like Amazon, it could turn out that its “side” business ends up getting more headlines than its core rideshare and delivery businesses. Of course, Amazon turned heads with Amazon Web Services, which generated about $80 billion in revenue and $23 billion in profit in 2022.
Uber is on record as saying it expects its ads business to hit $1 billion in revenue by 2024.
Uber is in the early innings of its multi-faceted growth story.
The company reports Q2 earnings on August 1st. The Juice will listen to the conference call and report back with the most pertinent details.
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