What are LUPA stocks? Is this another acronym I need to remember to be a successful investor? Not really. LUPA, or PAUL, is the acronym given for Lyft, Uber, Pinterest, and Airbnb stocks. Why did investors take an interest in these 4 stocks and what do they have in common? LUPA stocks have similarities that we will explore in the next sections.
Chart by TradingView.
Why are LUPA stocks grouped together? They are 4 tech companies that flourished in the mobile app generation.
Lyft, Uber, and Pinterest went public in 2019, while Airbnb did so at the end of 2020.
Before their IPOs, they were considered unicorns, meaning private equity investors gave each company a valuation superior to $1B. Their debuts on the stock market were a bit rocky for various reasons. Let’s take a deeper dive into each stock.
Lyft (NASDAQ: LYFT)
LUPA stocks number 1 is Lyft. Lyft was the first ride-hailing company to go public, in March 2019. Currently, it is also the least valuable of the LUFA stocks, valued at just over $13B.
Lyft only operates in 644 US cities and 12 Canadian cities. It is trailing Uber in the US in terms of market share, capturing a decent 35%.
Lyft began its business as a simple ride-hailing company. Since the company expanded in this field. They offer rides for healthcare patients who have a hard time finding a method of transportation for their appointments.
Second, they invested in city bikes in major US cities. Next, they also acquired Halo Cars. Now, they can also advertise on people’s cars. Finally, Lyft partnered with Sixt to allow its users to rent a car. Their future investments seem to align with self-driving cars. They plan to have that set up in 2023.
The company hasn’t had a single profitable year to date. Revenues are increasing since its creation and net income has been decreasing. In order to cut costs, many drivers have been furloughed and a focus on self-driving cars is in motion. Lyft’s business plan seems basic and lacks diversification to become a unique company.
Investors don’t seem too bullish at the moment. The stock is near its 52-week low and far from its IPO price. It’s cheap, but with the economy reopening after the pandemic, there is a light at the end of the tunnel. This investment can reward investors looking for rapid growth.
Uber (NYSE: UBER)
LUPA stocks number 2 is Uber. Uber went public two months after Lyft. Its market cap is far bigger, at over $70B. Uber is Lyft’s biggest competitor. Since its beginnings, the company faced a multitude of controversies among its executives. Be that as it may, I prefer Uber to Lyft when it comes to their business model.
Unlike Lyft, Uber is available in 80 countries. The business isn’t only about getting people from point A to point B. It also includes food delivery (Uber Eats), package delivery, package delivery, couriers, freight transportation as well as bicycle and scooter rentals. The latter is thanks to a partnership with Lime. Furthermore, Uber partnered up with local operators to offer ferry rides.
Uber has a few plans for the future. By 2040, they aim to have their entire fleet electric. They are also working on Uber Elevate to also provide services via the air. Uber’s revenues have also been increasing, but they are still not profitable. However, I believe they have a lot more potential than fellow rival Lyft. They are investing in the right direction and will be profitable in a few years.
The stock took a hit since its IPO and especially during COVID. Today, it is an attractive investment for those who believe that anything can go from point A to point B, not only humans in a car.
Pinterest (NYSE: PINS)
I don’t want to put Pinterest down right away, but I never understood why people are obsessed with this platform.
I’ve never used it and never will. I see it as Reddit for those who don’t know what Reddit is. A politically-correct Reddit? Sorry for all Pinterest readers, just my 2 cents.
How about some positivity? Pinterest went public in April 2019, during the spring of LUPA IPOs. The company makes money via ads and through their ‘’pins”. Users can buy products directly on the website of the app.
Pinterest gets a commission. They mostly appeal to women with above-average income. It is an opportunity to discover new brands and items you didn’t know you needed. Basically, an e-commerce platform.
In order for Pinterest to expand its brand, it needs to reach further than the US. However, monthly users have been increasing, perhaps due to the pandemic and more people staying at home.
I think that it will die down as the pandemic ends. Revenues increased far greater than other LUPA stocks and 2021 saw positive net income. The stock is far from its all-time high and barely above its IPO price.
Perhaps Pinterest will prove me wrong and expand its business. A post-pandemic economy will determine if its customers are loyal. If you believe in the business, do some additional research and make an educated decision.
LUPA Stocks: Airbnb (NASDAQ: ABNB)
Last but not least, is Airbnb. The company has been around since 2008 and it finally went public in December 2020. It’s currently the most valuable of the LUPA stocks, coming in at almost $100B
The company operates in over 200 countries. Revenues are well spread out across North America, Europe, and the rest of the world. I think we all are aware of what the business is like. Is there anything more to tell?
The business is simple. To grow even bigger, they can acquire more companies. As soon as the pandemic is over, Airbnb will have even more success. They can appeal to backpackers, families, and billionaires. Their market is literally anyone with a smartphone.
More and more homes are built daily and people won’t stop traveling anytime soon. Unusual destinations are also becoming more popular.
Airbnb took a big hit from the pandemic, but I am sure they will recover. What surprises me the most, is they haven’t posted a positive net income yet. However, it will come. The stock is only about 25% down from its all-time high and above its initial IPO valuation. I understand why it’s part of the LUPA group, but Airbnb is on a different level.
LUPA Stocks in Depth
LUPA stocks are unique. Hence their grouping. It’s like BANG stocks and FAANG stocks. Each stock is somewhat related to the other. As a result, you can look at specific groupings; like a basket trade.
Final Thoughts
LUPA stocks are grouped together for many reasons. First, they are born thanks to smartphone use. Second, they are not yet profitable. I see Uber and Airbnb in a separate class.
Uber has the capacity and vision to expand their business on a much larger scale than Lyft, They can even buy them out eventually. When most people I know what to order food or a driver, they think of Uber. They are essentially the Google of rideshare.
Airbnb also has a lot of growth capacity. Hotel chains, Booking.com, and Hostelworld are perhaps their biggest rivals, but they can acquire them down the line. Many users often seek the best price among various platforms, but Airbnb offers the best user experience.
When it comes to purchasing these stocks, it is very straightforward. They are available on your favorite US exchanges. If you want to learn more about how you can profit from the stock market, head on over to our free library of educational courses. We have something for everyone, including trading options for those with small accounts.
