Even though the gig economy received a boost during the pandemic, the recent ruling by California Superior Court Judge Frank Roesch that Proposition 22 is unconstitutional could serve a blow to companies capitalizing on the gig economy. Nevertheless, workers’ increasing demand for flexible and contractual work is expected to drive the gig economy’s growth.
According to brodmin’s research and data provided by Mastercard Incorporated (MA), the global gig economy is expected to be worth almost $350 billion in 2021. Moreover, investors’ interest in the gig economy stocks is evident from the SoFi Gig Economy ETF’s (GIGE) 6.4% return over the past month.
So, it could be wise to add gig economy stocks such as Uber Technologies, Inc. (UBER), Lyft, Inc. (LYFT), and Upwork Inc. (UPWK) to your watchlist. Wall Street analysts expect them to rally by more than 45% in the near term.
Uber Technologies, Inc. (UBER)
Popular ride-sharing services provider UBER also connects consumers with restaurants, grocers, other stores, and delivery service providers for meal preparation, grocery, and other delivery services. It operates through four segments: Mobility, Delivery, Freight, and Advanced Technologies Group (ATG), and Other Technology Programs.
UBER announced an exclusive partnership with FTD, LLC on July 28, 2021. Raj Beri, UBER’s Global Head of Grocery and New Verticals, said, “FTD has been a leader in the floral industry for more than a century. By pairing their expertise with our best-in-class logistics technology, we’re able to support FTD’s vast network of local florists and make Uber the leader in bringing on-demand flower delivery to customers nationwide.”
UBER’s gross bookings increased 114% year-over-year to $21.9 billion for the fiscal second quarter that ended June 30, 2021. The company’s revenue grew 105% year-over-year to $3.9 billion. Its net income came in at $1.1 billion, compared to a net loss of $1.8 billion in the prior-year period. Also, its EPS came in at $0.58, compared to a loss per share of $1.02 in the year-ago period.
Analysts expect UBER’s EPS to increase 91.7% in fiscal 2021. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. The company’s revenue is expected to increase 44.6% year-over-year to $16.11 billion in fiscal 2021.
Over the past year, the stock has gained 23.2% to close yesterday’s trading session at $40.95. Wall Street analysts expect the stock to hit $68.73 in the near term, which indicates a potential upside of 67.8%.
Lyft, Inc. (LYFT)
LYFT, known to operate a peer-to-peer marketplace for on-demand ride-sharing in the United States and Canada, also operates multimodal transportation networks that offer riders personalized and on-demand access to various mobility options. It provides Ridesharing Marketplace, Express Drive, Lyft Rentals, and a network of shared bikes and scooters.
On August 4, 2021, Logan Green, the co-founder and CEO of LYFT, said, “Since our inception, we’ve worked hard to defy the odds with a deep belief in our mission. We’ve consistently innovated and made big bets and this is just the beginning. We want to improve people’s lives with the world’s best transportation and we will continue working to deliver on this goal.”
LYFT’s revenue increased 125% year-over-year to $765 million for the fiscal second quarter ended June 30, 2021. Its contribution grew 285.3% year-over-year to $452 million. Its adjusted net loss decreased 93.2% year-over-year to $18 million. Also, its adjusted EBITDA came in at $23.8 million, compared to a loss of $280.3 million in the prior-year period.
For fiscal 2022, analysts expect LYFT’s EPS to increase 276.9% year-over-year to $0.69. In addition, it surpassed Street EPS estimates in each of the trailing four quarters. The company’s revenue is expected to increase 77.9% year-over-year to $865.2 million for the quarter ending September 30, 2021.
The stock has surged 74.6% over the past year to close yesterday’s trading session at $6.89. Wall Street analysts expect the stock to hit $50.59 in the near term, which indicates a potential upside of 47.5%.
Upwork Inc. (UPWK)
Online talent marketplace UPWK enables businesses to find and work with various independent professionals and agencies internationally. The company’s platform provides access to talent with multiple skills across various categories, including sales and marketing, customer service, data science and analytics, design and creative, and software development.
On July 30, 2021, Hayden Brown, the President and CEO of UPWK said, “We will continue to innovate, scale, and increase awareness of our work marketplace as we transform from a single product company to a multi-product company to capture an even larger part of our $1.3 trillion market opportunity.”
UPWK’s gross services volume increased 50% year-over-year to $875.80 million for the second quarter that ended June 30, 2021. The company’s revenue grew 42% year-over-year to $124.2 million. Its non-GAAP net income came in at $4.6 million, compared to a net loss of $3 million in the prior-year period. Also, its non-GAAP EPS came in at $0.03, compared to a loss per share of $0.03 in the year-ago period.
UPWK’s EPS is expected to increase 200% year-over-year to $0.02 for the quarter ending September 30, 2021. Its revenue is expected to increase 32.2% year-over-year to $493.9 million in fiscal 2021.
Over the past year, the stock has gained 224.6% to close yesterday’s trading session at $45.28. Wall Street analysts expect the stock to hit $71 in the near term, which indicates a potential upside of 56.8%.
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UBER shares were trading at $40.09 per share on Wednesday afternoon, down $0.86 (-2.10%). Year-to-date, UBER has declined -21.39%, versus a 21.33% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...
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