Ridesharing company Lyft Inc (NASDAQ: LYFT) is scheduled to release first-quarter financial results after the closing bell Tuesday, as rival Uber Technologies gears up for its initial public offering.
Shares of Lyft have moved down nearly 20% since closing at $78.29 apiece on March 29, the day the company debuted on the Nasdaq stock exchange.
The stock got a reality check last month after it tumbled sharply following a massive gain on its first day of trading. Wall Street remains skeptical about the future of the company because it is still losing nearly $1 billion annually.
Investor enthusiasm has also waned as they continue to await Uber’s initial public offering. In addition, most of the analysts covering Lyft stock have been giving it a “neutral” rating.
Analysts are expecting the San Francisco, CA-based firm to post a loss of about $978 million, higher than its loss of $911.3 million in the same period last year. Excluding one-time items, analysts expect Lyft to report a loss of approximately $274.1 million, or $3.77 per share for the quarter ended March.
FactSet analysts further predict that the company will come out with first-quarter revenue of $740 million, which is almost double from the prior-year quarter. Market participants will be closely watching Lyft’s promotional discounts and spending, as well as its rate of growth during the first quarter.
Analysts believe that Lyft stock’s volatility may continue when the firm publishes its first quarterly financial results as a public company later today. NYU Stern professor Aswath Damodaran told CNBC’s “Fast Money” last month that shares of Lyft should only be worth $59 apiece. Damodaran said that Lyft is a business that has not figured out how to make money, despite having burnt $1 billion in 2018.
“The driver is a free agent. The customer is a free agent. There is absolutely no stickiness in the business, and they know it. That’s the basic problem I have with the ride-sharing business not just Lyft. What they have succeeded at is changing the way we use car service. I have Uber and Lyft on my phone and I never take a cab. What they haven’t figured out is how to make me stay with them. I’m completely disloyal here. Same thing with drivers,” Damodaran said.
Lyft Company Profile
Lyft is the second largest ride-sharing service provider in the U.S., connecting riders and drivers over the Lyft app. Lyft has recently entered the Canadian market, in efforts to expand its market outside of the U.S.
Incorporated in 2013, Lyft offers a variety of rides via private vehicles, including traditional private rides, shared rides, and luxury ones. Besides ride-share, Lyft also has entered the bike- and scooter-share market to bring multi-modal transportation options to users.
