Analysts Review: Most Active Stocks Lyft, Inc. (NASDAQ:LYFT) & Uber Technologies, Inc. (NASDAQ:UBER)

Lyft, Inc. (NASDAQ:LYFT) ended lower -36.44% and complete the day at $10.31. The total number of shares changed hands during the day was 145,066,522 shares. After opening at $11.15, the stock hit as high as $11.22. However, it traded between $9.66 and $44.50 over the last twelve months.  On February 09, 2023, Lyft, Inc. (Nasdaq:LYFT) reported financial results for the fourth quarter and fiscal year ended December 31, 2022.

“In 2022 we took important steps to strengthen our business and delivered significant value to our customers,” said Logan Green, co-founder and chief executive officer of Lyft. “The better marketplace balance we see today creates significant opportunities for long-term profitable growth. To take advantage of this opportunity we must ensure competitive service levels. Reinforcing our competitive position, servicing more demand and reducing our fixed and variable costs will put us in the best position to deliver strong shareholder returns.”

“In Q4 we achieved the highest revenues in our company’s history and we outperformed guidance on Adjusted EBITDA excluding the action we took to strengthen our insurance reserves,” said Elaine Paul, chief financial officer of Lyft. “Our Q1 guidance is the result of seasonality and lower prices, including less Prime Time. Additionally, our different insurance renewal timing puts differently timed pressure on our P&L. We are not waiting for that to normalize to achieve competitive service levels. We are focused on driving greater growth and profitability.”

  • Revenue of $1.2 billion grew 21 percent from $969.9 million in Q4 2021. Relative to revenue of $1.1 billion in the third quarter of 2022, revenue grew 12 percent.
  • We strengthened our insurance reserves and accrued and other current liabilities by $375 million, with $225 million reflected in cost of revenue and $150 million in general and administrative expenses.
  • Net loss of $588.1 million compares with a net loss of $283.2 million in the fourth quarter of 2021 and includes $201.3 million of stock-based compensation and related payroll tax expenses.
  • Under our updated non-GAAP calculation, Adjusted EBITDA1was a negative $248.3 million versus a negative $47.6 million in the fourth quarter of 2021 and a negative $26.7 million in the third quarter of 2022.
  • Relative to guidance, Adjusted EBITDA2was a positive $126.7 million, exceeding the high end of outlook of $80 to $100 million3.
  • Unrestricted cash, cash equivalents and short-term investments was $1.8 billion at December 31, 2022.

According to WSJ, Lyft, Inc. (NASDAQ:LYFT) shares sank by more than a third on Friday after the ride-hailing company posted an unexpected quarterly loss and concerns mounted that it was falling further behind Uber Technologies, Inc. (NASDAQ:UBER) -4.43%

More than a dozen Wall Street analysts cut their price target for the stock, while six downgraded the stock’s rating, after Lyft reported underwhelming revenue guidance and an adjusted quarterly loss of 74 cents a share. Wall Street analysts expected a profit of 13 cents when adjusted for certain items, according to FactSet.

Shares of Lyft closed at at $10.31 Friday, down 36%. They are down more than 75% over the past 12 months. Uber shares have fallen less than 10% over the same period.

Lyft’s earnings came a day after Uber reported its strongest quarter ever as revenue soared 49% and users spent more for rides and Uber Eats, a food-delivery option for which Lyft has no equivalent.

Uber said it has also been attracting more drivers by giving them the opportunity to earn extra income by placing ads on their vehicles. It has also started allowing more drivers to see destinations and fare prices before committing to trips.

Analysts said that the mismatch between the rivals’ results shows Uber extending its lead in the race for dominance of the ride-hailing market. Uber’s market capitalization of $68.9 billion is more than 18 times that of Lyft’s $3.73 billion.

Analysts are also concerned with Lyft’s effort to remain competitive with Uber by lowering its base prices, which can eat into revenue growth that has been “overly reliant” on pricing rather than ride volume, D.A. Davidson analysts Tom White and Wyatt Swanson said in a research note.

The industry is also facing rising insurance costs this year, which spurred Lyft to increase its insurance reserves and strip adverse insurance events out of its adjusted earnings calculations. UBS analysts said bearish investors likely worry that the higher reserves “could end up as a cookie jar” for boosting its earnings results and muddy the company’s financials.

Some analysts are concerned with regional shifts in the ride-hailing market, whose otherwise broad recovery from the pandemic appears to be lagging on the West Coast. In that region, volumes remain at about 60% of 2019 levels, which has a disproportionately larger impact on Lyft than Uber, JP Morgan analysts said.

Michael Bond

Michael Bond

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