Lyft (LYFT.US) shares tumbled more than 30% before the opening bell after the ride-hailing company issued weak Q1 guidance, which overshadowed better than expected Q4 revenue figures. Company plans to reduce prices and claw back market share lost to larger rival Uber Technologies (UBER.US), which posted upbeat quarterly results on Wednesday.
-
Adjusted loss per share: 74 cents vs expected earnings of 13 cents
-
Revenue rose 21.05 YoY to $1.18 billion, vs. $1.16 billion, according to analysts surveyed by Refinitiv
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appWithin the last three years Lyft's revenue growth was not very impressive, averaging 8.19% annually. Source: BarChart
-
Quarterly loss was mainly caused by increase in insurance reserves, and a change in the way the company accounts for those reserves.
-
Company recorded 20.3 million active riders in Q4, below estimates for 23 million, effectively flat from the Q3 but up 8.7% year over year.
Over the last two years the number of Lyft's paying users, a key usage metric for the company, rose 28.2% annually to 20.4 million users, which is an optimistic sign. Source: BarChart
However while the number of active users is rising, it has not reached pre-pandemic levels. Source: Bloomberg
-
Factors pressuring the company's profits include lower prices, seasonality and changes in insurance renewal timing, Lyft Chief Financial Officer Elaine Paul said on Thursday.
-
"This is obviously not the level of growth or profitability we are aiming for or capable of. And we are laser-focused on driving additional growth and managing costs," said CEO Logan Green
-
"To take advantage of this opportunity and grow the market, we must prioritize competitive service levels," he added.
-
Lyft expects revenue of roughly $975 million in Q1 2023, well below StreetAccount expectations of $1.09 billion.
-
Fresh financial figures and guidance added to earlier concerns that it was falling behind Uber (UBER.US) as both companies attempt to rebound from pandemic lows.
-
"The more protracted Lyft's post-COVID marketplace rebalancing has become, the more concerned we have become with the company's ability to regain its prior category position," D.A. Davidson analyst Tom White said.
-
"These results reinforce our thesis that Lyft is at a structural competitive disadvantage versus Uber in terms of market share, driver supply and expenses," RBC Capital Markets analysts said on Friday.
Lyft (LYFT.US) stock is on its way to open today's session with a massive bearish gap not far away from recent low at $9.50. Break below this level, could lead to acceleration of the downward move. On the other hand, if buyers manage to halt declines, then the nearest resistance to watch is located around $18.60, which is marked with the upper limit of the local 1:1 structure. Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
