Lyft stock plunges 26% after forecast, insufficient ridership

Lyft Inc. said on Tuesday it had a better-than-expected first quarter, with chief executive Logan Green saying ride-sharing volumes hit “a new COVID high,” but stocks plunged after executives’ forecasts fell. are found to be insufficient.

LyftLYFT,
-29.91%
Shares initially rose more than 2% after results beat most analysts’ expectations except for user numbers, but then fell as executives spoke on a conference call from increased investment in drivers and marketing for the second quarter to meet increased demand. The shares fell 25.8% in after-hours trading to $22.83, after ending the regular session with a 2.4% drop in the regular session at $30.76, their lowest close since November 6, 2020.

Uber Technologies Inc. UBER,
-4.65%
shares were also down in after-hours trading, falling more than 10%, before the company announced late Tuesday that it would increase earnings reporting to Wednesday morning instead of the day after. -noon, as previously planned. The stock then rallied a bit and was down less than 5% at 7:15 p.m. EST.

See: Uber boosts earnings report after Lyft forecast sends stocks into slump

During Lyft’s call on Tuesday, executives predicted second-quarter revenue of $950 million to $1 billion, below the $1.02 billion analysts expected, and adjusted Ebitda $10 million to $20 million, well below the $83 million analysts expect on average, according to Set of Facts.

The ride-sharing company said it had 17.8 million passengers, down from 13.49 million passengers in the year-ago quarter, below analysts’ expectations of 17.9 million passengers. Lyft’s revenue per passenger was $49.18, above analysts’ estimate of $47.20.

Lyft posted a net loss of $196.9 million, or 57 cents per share, in the first quarter, compared with $427.3 million, or $1.31 per share, a year ago. After adjusting for stock-based compensation and other costs, Lyft reported profit of $24.6 million, or 7 cents per share, compared to an adjusted loss of 35 cents per share last year. Revenue climbed 44% to $875.6 million from $609 million in the year-ago quarter.

Analysts polled by FactSet had expected an adjusted loss of 7 cents per share on revenue of $848.9 million.

Elaine Paul, Lyft’s chief financial officer, in a statement attributed the company’s “outperformance” to “increased demand and resilient engine levels.” Still, Green said on the call that despite having 40% more active drivers in the first quarter year-over-year, “we want to continue to improve service levels with a view to future growth”. Executives said rides are only about 70% recovered from the fourth quarter of 2019, so they expect to need more drivers.

But in response to an analyst’s question about whether Lyft is considering partnerships with the taxi industry, such as those entered into by Uber that will help that company’s driver supply, Logan said no. the moment. He cited reliability and regulatory issues around pricing as reasons he thinks the partnerships would be “a challenge,” though he said he would monitor how it all works.

Lyft shares are now down 28% year-to-date, while the S&P 500 SPX index,
+2.99%
down about 12% since the start of the year.

The company last week restated its 2021 results, saying an accounting error caused it to report a loss for the year that was lower than it actually incurred. The company said in a filing with the Securities and Exchange Commission that its loss for 2021 should have been $1.06 billion, or $3.17 per share, instead of $1.01 billion, or 3 $.02 per share.

Earnest L. Veasey