LUPA Stocks

What Are the LUPA Stocks?

LUPA is the nickname for the stocks of four companies that were born in the mobile app generation. Also called the PAUL stocks, they include Lyft Inc. (LYFT), Uber Technologies Inc. (UBER), Pinterest Inc. (PINS), and Airbnb Inc. (ABNB). All four companies are actively traded on public stock exchanges.

Lyft

Lyft, the popular ride-sharing app based in San Francisco, was founded in 2007 as Bounder Web, Inc. It changed its name to Zimride in 2008 and then to Lyft in 2012. It was founded by entrepreneurs Logan Green and John Zimmer.

After years of struggling, Lyft finally delivered its first-ever quarter of generally accepted accounting principles-based profitability in the second quarter of 2024. While it remains to be seen if the trend continues, Lyft offered guidance to being free-cash-flow positive for the full fiscal year. Struggles with unit economics and years of unprofitability resulted in Lyft shares falling about 83% between its 2019 IPO and September 2024.

Uber

Uber, Lyft's key competitor in the ride-sharing economy, has had a busy decade since it was formed in 2009 as UberCab. The brainchild of entrepreneurs Travis Kalanick and Garrett Camp, the ride-sharing app operates globally.

Since 2022, Uber has focused on expanding its business beyond ride-hailing, including growing its food delivery service, Uber Eats, and freight services. Uber's forays into advertising have also paid off, with revenue run-rate from advertising exceeding $1 billion in the second quarter of 2024. Success from loyalty programs such as Uber One has also translated into ridership, with gross bookings growing 19% year-over-year during the same quarter. Unlike its competitor, Lyft, early investments in Uber have paid off, with the shares rising 46% since its initial public offering (IPO).

Pinterest

The popular photo-sharing online pin-up board was the vision of entrepreneurs Ben Silbermann, Paul Sciarra, and Evan Sharp, who founded the company in 2010.

Pinterest's ad strategy focuses on blending advertisements into its user experience by positioning ads as engaging, shoppable content that aligns with user intent, particularly for those seeking inspiration or products. This approach to ecommerce seems to be working, as Pinterest reported a 21% year-over-year revenue growth to $854 million and a 12% increase in global monthly active users, reaching 522 million for its second quarter of 2024. The stock is up about 25% since its IPO in 2019.

Airbnb

The popular peer-to-peer short-term lodging rental platform has disrupted the travel industry in ways its founders may not have imagined when it was launched in 2008. The company also has expanded into tourism services and other ventures.

As of 2024, Airbnb has not shed its regulatory woes, particularly in major cities like New York and San Francisco, where strict short-term rental laws have been put in place to address concerns over housing affordability and community impact. These issues aside, Airbnb continues to be very profitable, generating an adjusted EBITDA of $894 million and a free cash flow of $1 billion in the second quarter of 2024.

The strong financial performance was the result of improving listing quality, which saw Airbnb remove 200,000 listings that did not meet guest expectations and expand into underutilized markets. As of Sept. 26, 2024, Airbnb shares were down about 12% since its IPO in 2020.

The Bottom Line

LUPA stocks (Lyft, Uber, Pinterest, and Airbnb) represent four of the most notable companies born from the mobile app generation, each having faced significant challenges since their IPOs. While Uber and Airbnb have achieved solid profitability and growth, Lyft is still working through operational and market hurdles, only posting its first-ever quarter of GAAP profitability in the second quarter of 2024.

Pinterest continues to create newer types of engaging ads, which has translated into a growing user base growth and is holding its own against ad giants such as Meta and Alphabet. Despite regulatory challenges, particularly for Uber and Airbnb, these companies continue to evolve and adapt to market demands.