Can HYRE Go Higher?

Posted on January 4, 2021 by Brad Steveson

HyreCar (HYRE) has come a long way since it’s plunge to 88c per share back in April 2020. I remember buying shares back around that time and hoping I was right that this company would rebound from the Covid 19 shutdowns. In my mind it was so cheap I thought the odds were with me even with the uncertainty of how long the shutdowns would last and the impact the shutdowns would have on Hyrecar.

HyreCar is a carsharing marketplace for ridesharing that allows car owners to rent their idle assets to rideshare drivers safely, securely and reliably. Their dual-sided marketplace allows vehicle owners the opportunity to earn money on their idle vehicle assets while providing access to reliable options for drivers looking to rent cars for rideshare companies like Uber and Lyft. And of course the Covid 19 shutdowns were wreaking havoc on the ridesharing business.

Remember while ridesharing was on the decline, delivery services were now in high demand. Hyrecar made the adjustment. They updated their technology and insurance coverage to accommodate this new demand and by June they had recovered back to pre-Covid 19 rental day levels. As states began to reopen their economies their business model and platform allowed them to leverage the new opportunities and create a larger market with ridesharing and delivery.

So what’s on tap for 2021? Hyrecar receives 25,000 driver leads every month while they have about 3,000 cars on their platform. They have effectively doubled their TAM by adding delivery services. Their all in costs are cheaper than their competitors because of their asset light model. They are working with a specialty fleet operator that promises to add 6,000 cars to their platform. This will not roll out all at once, but over the next 3 or 4 quarters according to the CEO. The company also expects EV partnerships to come online in 2021 and continues to work to secure additional partnerships that will add cars to the platform.

I have completed my own forecast of what is possible based on ramping up their new partnership and I believe we could see a cash flow positive quarter as early as Q1 2021 and if not, then I strongly suspect we will see that for Q2. Looking beyond that, I see something close to 50c in EPS in 2021 and moving from negative 7.5m in adjusted EBITDA for full year 2020 to positive 9.0m in adjusted EBITDA for full year 2021. If this is how things work out, then I believe the answer is yes. HYRE can go higher.

The difficulty is determining how successfully their partnership will ramp and how successful they will be with securing new partners and hanging on to the partnerships they already have. Some of their ridesharing partnerships went away during the Covid 19 shutdowns. This is something that needs to be monitored if you are an investor or thinking of investing in this company. As always, do your own due diligence. I recommend listening to the last earnings call and the recent LD Micro Presentation if you are interested in this company.

Disclosure: I am long and I may buy or sell shares within the next 72 hours.

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