Lyft Inc. isn’t getting too many stars for its latest earnings report, which is helping to send shares down more than 30% Friday morning as numerous bulls head for the hills and fret about the company’s struggles to compete against rival Uber Technologies Inc.
While the ride-hailing company topped revenue expectations for the latest quarter, it fell short in its top-line outlook and delivered a messy outlook for adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) that came in below the consensus view but also reflected accounting changes in how the company treats insurance reserves.
In addition, Chief Executive Logan Green said that Lyft’s
LYFT,
-36.16%
work to “prioritize competitive service levels” will impact its prior 2024 targets for free-cash flow and adjusted Ebitda.
Analysts were blunt with their takes following the report, which brought concerns about the company’s positioning and its ability to drive profits. At least eight analysts downgraded the stock after earnings, according to data from FactSet.
“In 22 years on the Street as a tech analyst we have listened to 1,000s of conference calls with many highs and lows,” wrote Wedbush analyst Daniel Ives. “Last night’s Lyft call was a Top 3 worst call we have ever heard as in our opinion as management is trying to play darts blindfolded with the expense structure going forward and gave an Ebitda outlook which was a debacle for the ages.”
He added that “Lyft’s business model faces an Everest-like uphill climb to show growth while profitable in a stark contrast to big brother Uber which is moving in the opposite direction of balanced fundamentals.”
Ives cut his rating on Lyft shares to neutral from outperform and reduced his price target to $13 from $17.
Uber
UBER,
-3.72%
showed progress on profits in its latest report. Its stock was off about 3% shortly after Friday’s open.
D.A. Davidson’s Tom White commented that Lyft seems to be struggling to find its footing as pandemic conditions subside.
While the company once rode its position as a “kinder” ride-hailing platform, drivers and riders faded their usage during the height of the pandemic, “and the company has found it harder to get its network effects humming again since (relative to its primary competitor that has superior size/scale and marketplace liquidity advantages thanks to a local delivery offering).”
He downgraded Lyft’s stock to neutral from buy and cut his price target to $12.50 from $19, writing that he’s become more “concerned with the company’s ability to regain/rebuild its prior category position (or how much it might cost to do so).”
While Lyft’s management “indicated it will look to offset these investments in lower prices via further cost/expense cuts,” White said, “it remains to be seen how LYFT’s ability to compete/innovate may be impacted by such moves.”
JPMorgan’s Doug Anmuth chimed in that while the U.S. ride-share market was recovering from the pandemic, “Lyft is not.”
“We are concerned that it has become more difficult for Lyft to operate in a normalized environment, and we believe that Uber’s network and scale benefits are increasingly weighing on Lyft’s execution,” he said in a note to clients.
While driver supply was increasing — a trend that will improve usage — it meant less opportunity for “prime time,” or surge pricing, which may result in less revenue.
Anmuth moved to a neutral rating from his previous outperform stance, and he slashed his target price nearly in half, to $15 from $29.
Source: https://www.marketwatch.com/story/lyft-stock-melts-down-after-earnings-debacle-for-the-ages-45418807?siteid=yhoof2&yptr=yahoo
Lyft stock melts down after earnings ‘debacle for the ages’
Lyft Inc. isn’t getting too many stars for its latest earnings report, which is helping to send shares down more than 30% Friday morning as numerous bulls head for the hills and fret about the company’s struggles to compete against rival Uber Technologies Inc.
While the ride-hailing company topped revenue expectations for the latest quarter, it fell short in its top-line outlook and delivered a messy outlook for adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) that came in below the consensus view but also reflected accounting changes in how the company treats insurance reserves.
In addition, Chief Executive Logan Green said that Lyft’s
-36.16%
LYFT,
work to “prioritize competitive service levels” will impact its prior 2024 targets for free-cash flow and adjusted Ebitda.
Analysts were blunt with their takes following the report, which brought concerns about the company’s positioning and its ability to drive profits. At least eight analysts downgraded the stock after earnings, according to data from FactSet.
“In 22 years on the Street as a tech analyst we have listened to 1,000s of conference calls with many highs and lows,” wrote Wedbush analyst Daniel Ives. “Last night’s Lyft call was a Top 3 worst call we have ever heard as in our opinion as management is trying to play darts blindfolded with the expense structure going forward and gave an Ebitda outlook which was a debacle for the ages.”
He added that “Lyft’s business model faces an Everest-like uphill climb to show growth while profitable in a stark contrast to big brother Uber which is moving in the opposite direction of balanced fundamentals.”
Ives cut his rating on Lyft shares to neutral from outperform and reduced his price target to $13 from $17.
Uber
-3.72%
UBER,
showed progress on profits in its latest report. Its stock was off about 3% shortly after Friday’s open.
D.A. Davidson’s Tom White commented that Lyft seems to be struggling to find its footing as pandemic conditions subside.
While the company once rode its position as a “kinder” ride-hailing platform, drivers and riders faded their usage during the height of the pandemic, “and the company has found it harder to get its network effects humming again since (relative to its primary competitor that has superior size/scale and marketplace liquidity advantages thanks to a local delivery offering).”
He downgraded Lyft’s stock to neutral from buy and cut his price target to $12.50 from $19, writing that he’s become more “concerned with the company’s ability to regain/rebuild its prior category position (or how much it might cost to do so).”
While Lyft’s management “indicated it will look to offset these investments in lower prices via further cost/expense cuts,” White said, “it remains to be seen how LYFT’s ability to compete/innovate may be impacted by such moves.”
JPMorgan’s Doug Anmuth chimed in that while the U.S. ride-share market was recovering from the pandemic, “Lyft is not.”
“We are concerned that it has become more difficult for Lyft to operate in a normalized environment, and we believe that Uber’s network and scale benefits are increasingly weighing on Lyft’s execution,” he said in a note to clients.
While driver supply was increasing — a trend that will improve usage — it meant less opportunity for “prime time,” or surge pricing, which may result in less revenue.
Anmuth moved to a neutral rating from his previous outperform stance, and he slashed his target price nearly in half, to $15 from $29.
Source: https://www.marketwatch.com/story/lyft-stock-melts-down-after-earnings-debacle-for-the-ages-45418807?siteid=yhoof2&yptr=yahoo