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Morning Markets: The season of IPOs is finally back. Let's talk about the rumor according to Lyft's assessment.
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The announcement of the Lyft IPO today was announced yesterday: the popular curtain rod transport company is scheduled to start its presentation tour in mid-March and the company is ready to release its document S- 1 as early as next week. The unicorn, which was privately filed late last year, is expected to beat rival Uber on the public markets.
A last little piece of information came out yesterday and caught our attention. According to Reuters, which announced Feb. 20 about Lyft's upcoming roadshow, "Lyft is now expecting its IPO to be between $ 20 billion and $ 25 billion".
I could not remember where this assessment was based on Lyft's previous ratings and, honestly, what were his latest earnings figures. My brain is an Uber-Mush. So, let's quickly remember what we knew and stack these data points next to the expected Lyft price.
Lessons in history
Let's go back to 2017. Postponed early 2018, Lyft detailed some of its financial performance. According to CNBC's contemporary coverage: "Hi [sic] Lyft claims to have earned more than $ 1 billion in GAAP revenue in 2017 and posted 168% growth in the fourth quarter compared to the same quarter of the previous year. "
It is a set of useful measures because it includes an absolute result and a growth rate.
A quick note on what the statement means, though. In business accounting, "GAAP", an acronym, means "no bullshit". Thus, when we see "GAAP revenues" in the case of this Lyft metric, we can assume that the $ 1 billion result is about what the company could report in an IPO filing; it is not polluted by products that will not count as income.
From this 2017 result, we can move on to what Lyft did in 2018. For more details on Lyft's performance during the first half of 2018, read this summary. If you do not have the time (as I understand it), here is the abridged version: Lyft's turnover has risen from $ 412 million in the first half of 2017 to $ 909 million in the first half of 2018. is a growth rate of more than 120%.
However, the growth and broadening of the revenue base resulted in a loss of $ 255 million in the first half of 2017 (the unicorn is not clear and precise, but we have no clear idea of the relevance of this measure is $ 373 million, the first half of 2018.
Growth of Lyft
We do not have results on H2'2018 Lyft revenue. But we can invent ourselves using different growth rates. The resulting figure will allow us to see what kind of turnover the company in charge could draw with valuations of $ 20 and $ 25 billion.
Assuming that Lyft increases its turnover in the second half of 1820, for example, by 30% compared to the total for the first half of 2014, the company would generate a turnover of 2.1 billion dollars . With a valuation of $ 20 billion, the company is worth a little less than 10 times its revenue of 2018. At $ 25 billion, the figure rises to a multiple of just under 12.
(Reference articles on changes to the IPO Filing Rule Book are available here and here.)
For your pleasure, accelerate Lyft's growth rate by increasing, in your opinion, the revenue of the second half of 2018 and see how the change will affect the implicit revenue range from which Lyft could benefit in 2019. 40 % H1 "2018 to H2" In 2018, for example, Lyft's annual business figure reached nearly $ 2.2 billion. His multiple business figure of $ 20 and $ 25 billion jumps to 9.2 and 11.5. At 50%, they fall to 8.8x and 11x flat.
Are these incomes multiple, neutral or avaricious? Let's ask Uber.
Uber at $ 120 billion
Uber's fourth quarter financial results have recently been released (our coverage here), but we want more than one financial point of view in the fourth quarter, it's a year-round count. So, let's press our TechCrunch friends:
"Compared to full year 2017, Uber gross bookings increased 45% to $ 50 billion in 2018. This resulted in an increase in GAAP revenues of 43%, compared to to 2017, to reach $ 11.3 billion. Losses also improved (decreased) from $ 2.2 billion adjusted EBITDA in 2017 to $ 1.8 billion in 2018. "
The number that matters to us most is the $ 11.3 billion figure. Remember that Uber's IPO value is $ 120 billion. The last time we compared Uber's results to the price tag, we did not have the fourth quarter results. We do now!
With a valuation of $ 120 billion, Uber accounts for approximately 10.6 times its 2018 revenue. This is quite in the same range as what Lyft apparently targets. However, Uber is growing more slowly than its small rival in terms of percentage (this is when the scale becomes an effective occupancy tax by comparing percentage growth side by side!).
If Uber can generate the same turnover despite larger losses (in gross terms, we'll have a better idea of the relative performance when we'll have both S-1s) and slower growth ( implied via the recent performance we will see again) will be interesting. Uber certainly has a more global story to tell. Lyft, on the other hand, has a domestic tale alone.
So what?
To summarize for those of us who are bored, the target emissions ratings reported by Lyft seem to match what Uber expects for himself. The effectiveness of each company in convincing investors that this is the special case of the two is not clear, but they are apparently very close in terms of objectives for now.
With Lyft just above the horizon, get excited. We will finally get decent cash from gosh-damn (Dropbox was not worth $ 10 billion when it became public, so its IPO does not count) and it's exciting.
More when we have our mittens on the S-1.
Top Image Credit: Li-Anne Dias.
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