Raymond James Reinstates Coverage on Uber, DoorDash, Lyft; Initiates Coverage on Instacart

Raymond James has recently reintroduced its coverage on several tech companies, including Uber Technologies Inc., DoorDash Inc., Lyft Inc., and has also initiated coverage on Instacart.

For Uber, the firm has assigned a “strong buy” rating, founded on the “Robo-Ride” thesis. This perspective highlights Uber’s pivotal role in the advancing field of autonomous transportation, particularly noting its collaboration with Waymo as a catalyst for future growth. With over 150 million monthly active users, Uber’s extensive customer base is deemed vital for maximizing the deployment of autonomous vehicles, especially robotaxis.

Revenue forecasts for Uber are optimistic, estimating growth to $43.42 billion in 2024 and $50.94 billion in 2025, reflecting year-over-year growth rates of 16.5% and 17.3%, respectively. Adjusted EBITDA is also projected to increase significantly, from $6.45 billion in 2024 to $8.86 billion in 2025, illustrating the company’s improving profitability. The anticipated expansion of Uber’s autonomous fleet, thanks to its partnership with Waymo, is expected to generate a revenue uplift of 1% to 2%, as autonomous rideshare vehicles enhance network efficiency.

Uber’s long-term success hinges on its ability to leverage partnerships in autonomous vehicles while maintaining robust performance in its primary services, such as Uber Eats and Uber Freight. The firm is optimistic that demand for non-UberX services like Uber One and Eats will continue to grow, alongside potential revenue from its nascent advertising sector.

DoorDash has received an “outperform” rating, credited to its solid unit economics and scalable restaurant delivery operations. The company is focused on improving operational efficiency and branching out into new areas like grocery delivery, which bolsters Raymond James’s positive outlook. Projected revenues suggest growth from $10.59 billion in 2024 to $12.46 billion in 2025, with Gross Order Value expected to rise from $79.54 billion to $91.83 billion during the same period. DoorDash’s Adjusted EBITDA is forecasted to increase from $1.87 billion to $2.71 billion, driven by expanding margins in its U.S. segment and international efforts. The company’s strategy also includes a multi-modal delivery network, incorporating robotics and drones, although regulatory challenges could hinder short-term advancements.

Regarding Lyft, Raymond James has reinstated a “market perform” rating. Although Lyft has made strides in enhancing user experiences for both riders and drivers, substantial risks remain in the highly competitive robotaxi sector. Unlike Uber, Lyft has not established significant autonomous vehicle partnerships, limiting its growth potential in this arena. Revenue projections for Lyft estimate a rise to $6.36 billion by 2025, with Adjusted EBITDA reaching $458 million. Nevertheless, profitability is constrained by ongoing investments in rider incentives and limited insight into its autonomous vehicle operations.

Instacart has been initiated with a “market perform” rating, reflecting its recent growth in grocery deliveries. The company has cultivated a strong enterprise presence across 1,500 grocery brands, yet uncertainty surrounding future demand in consumer-packaged goods advertising poses challenges for EBITDA growth. Instacart’s revenue is expected to increase modestly, reaching $3.38 billion in 2024 and $3.63 billion in 2025, with Gross Transaction Value slightly rising from $33.33 billion to $35.71 billion. While Instacart has the opportunity to expand its advertising reach, the fluctuations in CPG demand remain a significant concern. Nevertheless, its established market share in large-basket grocery deliveries positions it favorably, although future expansion is contingent on enhancing advertising revenues and deepening enterprise relationships.

Valuation assessments from Raymond James indicate that Uber and DoorDash are trading at appealing multiples, with Uber at 14.7x its projected 2026 EV/EBITDA and DoorDash at 25x. Conversely, Instacart’s valuation reflects more cautious expectations, considering uncertainties in its advertising model and enterprise scaling. Lyft is also perceived as a less aggressive investment, trading at a lower multiple due to its challenges in adapting to autonomous operations.