Wall Street will be watching earnings from gig economy companies in the coming weeks to see if and how the pandemic will impact recovery trends. But analysts are not aligned on how the sector is playing. The 2022 sale underscores the challenges the show economy stock has faced in recent years as new funding and venture capital cool, analysts told clients. But some of the main players in the space – namely Uber, Lyft and DoorDash – have given early signs of possible comebacks in 2023. Lyft has jumped 46.8% since the beginning of 2023, followed by Uber and DoorDash at 22.8% and 20.1%, respectively. “After a decade of growth at all costs, the bumpiest part of the ride is in the rearview mirror. Market winners are entrenched, marketing intensity has decreased, and the US market has begun to rationalize through consolidation,” SVB analyst MoffettNathanson Michael Morton said in a note to clients. “We are sober in our assessment of past challenges but encouraged by the addressable market, consumer willingness to spend, and improving the underlying unit economy in the core business of US Restaurant Delivery and Rideshare,” he added. Analysts are now pondering how to position themselves ahead of major gig company earnings reports, starting with Uber on February 8. See where each company is: Uber UBER LYFT, DASH 5Y mountain Gig economy Shares One area there are analysts at SVB MoffettNathanson, Jefferies and Bernstein all agree: be bullish on Uber. Bernstein expects an in-line quarter from Uber, while noting the potential to achieve positive EBITDA after adjustments in the next two quarters. Despite being below Wall Street estimates for orders, Morton SVB expects a profit. But he sees Uber as a potential winner in the post-pandemic return to events and travel. “There is room for a global return to pre-pandemic human mobility,” Morton said. “Uber is a way to invest in trends.” Jefferies analyst John Colantuoni said Uber’s “dominant scale and network effects” could support reinvestment into customer experience and adoption, which should build loyalty and help grow market share. The company’s focus on market expansion through new locations and offerings including goods and food delivery also help increase the total addressable market and cross-selling opportunities, he said, while also helping to reduce risk. Lyft analysts at the three companies, however, did not know much about Lyft’s competitors. Bernstein analyst Nikhil Devnani called the company “confused” and rated the market on earnings. While that said, fourth-quarter estimates feel conservative as corporate service costs rise and recovery tailwinds, recent outperformance and an uncertain economic outlook make it difficult to adjust expectations. He is the only analyst of the three who expects the stock to rise next year. Devnani expects revenue for the fourth quarter to be closer to upper expectations. And said active rider and revenue guidance and comments can be more than EBITDA. Also rating the market’s performance, Morton said Lyft “came up short” in terms of scaling the business and finding a way out of the driver shortage. Jefferies’ Colantuoni, who rates the stock a hold, cited company data that shows riders prefer Uber two-thirds of the time. DoorDash analysts are divided on DoorDash. Morton is the most optimistic about DoorDash of the three, saying he prefers delivery over rideshare because of its larger addressable market, better financial transparency and better worker dynamics. He said DoorDash has a “best-in-class” management team and is a market share leader whose core business is “hitting an inflection point in profitability.” He gave the stock an outperform rating with mixed expectations for the earnings report. Morton said he expects orders to come in below consensus expectations, and profits to come in above where others on Wall Street anticipate. Bernstein also gave the stock an outperform rating, with Devnani noting that food deliveries have slowed but hit a rational growth rate. He said the company could beat its EBITDA guidance. “We increased our adjusted EBITDA forecast to $600M (+$50M) and we see potential upside for this figure if margins in non-core segments improve this year,” he said. “Assuming that we are in the right direction, the debate among investors is whether the combination will be ‘good enough’. We think it will be, given the emphasis on operating leverage. .” Colantuoni is less optimistic, with Jefferies rating the stock underperforming. While he said DoorDash is the most popular delivery platform among restaurant delivery app users today and dominates the minds of potential users, he is concerned about the restaurant delivery platform’s ability to maintain growth after gaining ground during the pandemic. – CNBC’s Michael Bloom contributed to this report.