How much sense sounds at $ 20B or $ 25B?

Morning markets: The IPO season is again late. Let's talk about Lyft's reputation valuation.

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News broke yesterday that Lyft's IPO raced against us, with the popular ranking company set to begin its roadshow in mid-March, and the company ready to publish its S -1 document as soon as next week. The Unicorn, originally filed privately late last year, appears to be rival Uber to the public markets.

A last bit of information came out yesterday that caught sight of us. According to Reuters, who broke the story on February 20 about Lyft's forthcoming road show, "Lyft now expects to be valued between $ 20 billion and $ 25 billion in his IPO."

I could not remember where the valuation fits in with Lyft's previous valuations, and honestly, what the most recently mentioned income figures were. My brain is a Uber mush. So let's quickly remember what we knew and stack the data points next to Lyft's expected price tag.

History Lessons

Let's rewind the clock to 201[ads1]7. Reported in early 2018, Lyft outlined some of his financial results. According to the simultaneous coverage of CNBC: " Ride hagl [sic]the company Lyft says it has ordered over $ 1 billion in GAAP revenue in 2017, and showed a growth of 168% in the fourth quarter compared to last year." 19659006] It is a useful set of calculations as it includes an absolute revenue result and a growth ceiling.

A quick note on what the statement means, but. In the company accounts, "GAAP", an acronym, means "no ambiguity". So when we see "GAAP revenue" in the case of this lift metric, we can assume that the $ 1 billion revenue result is close to what the company could report in an IPO filing; It is not contaminated with things that will not eventually count as revenue.

From the 2017 result we can look at what Lyft did in 2018. Read more about Lyft's results in the first half of 2018, read this summary. If you don't have the time (I understand), the short version is: Lyft's revenue increased from $ 412 million in the first half of 2017 to $ 909 million in the first half of 2018. It's a growth of over 120 percent. [19659006] However, the growth and the higher revenue base cost Lift: The riding unicorn lost $ 255 million in the first half of 2017 (precisely what this metric count is not clear, so treat it as more directional than final) and $ 373 million in the first half of 2018.

The Growth of the Lift

We do not have a H2 & # 39; 2018 lifting income result, unfortunately. But we can manage by using different growth rates. The resulting figure will let us see what type of revenue more driving registers could enjoy at $ 20 billion and $ 25 billion.

Assuming that Lift increased its H2 & # 39; 2018 revenue by 30 percent from its H1 & # 39; In 2018, the company will generate approximately NOK 2.1 billion in revenue. At $ 20 billion, the company is worth just under 10 times its 2018 revenue rate. At $ 25 billion, the figure increases to a majority of under 12 years.

(Reference objects about changes in the IPO archive process rule book can be found here and here.)

For fun, press up on Lyft's growth rate, increase H2 & # 39; 2018 revenue as far as you think fair, and see what the change does for the implicit revenue multiplier that Lyft could enjoy in 2019. For example, at 40 percent H1 & 201; 2018 to H2 & 2018 growth, full-year revenue is raised nearly $ 2.2 billion. Revenue multiples of $ 20 and $ 25 billion glide to 9.2 and 11.5. At 50 percent they fall to 8.8x and 11x flat.

Are they rich, neutral or prickly income multiples? Let's ask Uber.

Uber At $ 120B

Uber's quarterly results have recently come out (our coverage here), but what we want more than a quarter of a view is an all-year registration. So let's lean on our friends at TechCrunch:

"Compared to the entire fiscal year 2017, Uber's gross orders increased 45 percent, to $ 50 billion in 2018. This resulted in an increase in GAAP revenue of 43 percent, from 2017 to $ 11.3 billion, losses also improved (reduced) from $ 2.2 billion in adjusted EBITDA losses in 2017 to $ 1.8 billion in 2018. "

The number we care most about is $ 11.3 billion. Remember that Uber's renowned IPO valuation is $ 120 billion. When we last compared Uber's results with the price tag, we did not have quarterly results. We are doing now!

With a valuation of $ 120 billion, Uber is worth 10.6x its 2018 revenue story. It is right in the same range as Lyft's aim is. However, Uber grows slower than its smaller competitor in percentages (this is when the scale becomes an effective useless tax in lateral percentage growth comparisons!).

If Uber can manage a similar income more despite major losses (in gross terms, we get a better idea of ​​relative performance when we have both S-1s) and slower growth (implicitly via recent performance, again, we see ) will be interesting. Absolutely, Uber has more of a global story to tell. Lifting, on the other hand, has a home warning alone.

So what?

The sum for those of us who are bored, the reported target IPO values ​​lifted pretty much to what Uber expects for themselves. How effective each company will be on convincing investors that it is the special one of the two is not clear, but they are apparently close in terms of goals for now.

With Lift just above the horizon, be hyped. We'll finally get a gosh-darn-decacorn liquidity (Dropbox wasn't worth $ 10 billion when it went public, so the IPO doesn't count) and it's exciting.

More when we get our gloves on S -1.

Top Image Credit: Li-Anne Dias.