HyreCar Inc. (HYREQ)

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HyreCar, Inc. (NASDAQ: HYRE) A Stock that Lets You Profit Ahead of Lyft and UBER IPO
August 20, 2018

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Miami, FL – August 20, 2018 (EmergingGrowth.com NewsWire) — EmergingGrowth.com, a leading independent small cap media portal with an extensive history of providing unparalleled content for the Emerging Growth markets and companies, reports on HyreCar, Inc. (NASDAQ: HYRE)

HyreCar, Inc.: A Stock that Lets You Profit Ahead of Lyft and UBER IPO

With explosive growth in the “sharing economy,” equity investors are finding ways to cash in on this trend that allows strangers to connect to various services through technology. One of the obstacles for most investors is that majority of these companies are privately owned, and only selected qualified investors have access to these investment opportunities.

The good news is that two of the car-sharing giants namely Lyft Inc. and Uber Technologies, are progressing towards an initial public offering (IPO) this year. The timeline could be uncertain since underwriters go through several processes from the initial due diligence up to listing of the shares. There is, however, a NASDAQ-listed company called HyreCar Inc. (NASDAQ: HYRE), for equity investors who want to immediately gain exposure on this disruptive technology.

“Niche Market”

Headquartered in Los Angeles, California, HYRE operates in a niche market as a car matchmaker: connecting drivers interested to drive for Lyft and Uber, with car owners interested to lease out their cars. The founders, Andy Basal and Abhi Arora started the company in 2014 to accommodate an un-serviced rental market for drivers willing to drive for these car-sharing companies, but did not have qualified vehicles.

Under HYRE’s platform, car owners can post their vehicles, whereas drivers can browse the cars inventory. Once a driver picks a car, they would create a profile including basic information such as driver’s license, social security number and credit card or debit card for payment. Subsequently, HYRE then checks the profile for sex-offenses, criminal records, and other watch lists.

The company’s business model is that revenues are earned from “haircut” from fees paid by the driver, while car owners pay a small fee for the platform. In addition, they also charge on commercial automobile insurance policy covering both drivers and cars for the time when the driver is using the owner’s vehicles, but not actively driving with the platform.

“A Case of Broken IPO”

On May 2018, HYRE shares debuted in the market, and raised $12.5 million in the process; the proceeds of the transaction will strengthen their financial position. Prior to the IPO transaction, the company raised $5 million in 4 funding founds since 2016, with the last pre-IPO funding rounding amounting $1.5 million, through a debt financing transaction in February 2018.

Its share price performance has been unimpressive, declining by approximately 41%, since IPO. Several factors including limited operating history, continued net losses, and imminent competitive risks from Lyft and Uber, have worried investors.

While these concerns appear valid, there is really a strong market potential for connecting interested drivers and car owners. For the second quarter of 2018, the company disclosed that they have more than 175,000 driver profiles in over 35 active states. For full year 2018, management anticipates revenues of $10 million, or a 213% year-on-year expansion, albeit HYRE is expected to report further net loss for the year.

“Untapped Opportunities”

The company should able to turnaround its financial performance, as it will reach critical mass in the near term, and exhibit operating leverage in the business. Moreover, there is unaddressed need for ride-sharing business in non-transportation niche industries, including package and food deliver, tasks market, and leisure rentals. Accordingly, these niche markets should create opportunities to HYRE, with drivers in each of these industries will likely need to rent vehicles to accomplish their jobs.

Assuming HYRE would be able to reach $10 million in sales, the stock’s 12-month share price target could be reach $6.6 based on 6.6x sales multiple, or a 125% upside from current price levels. The main price catalysts are increased investor awareness through hiring of investor relations firm, and finalization of Lyft and Uber Technologies IPO process.

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