Lyft Beats Analyst Estimates, Investors Less Than Thrilled Over Lack of Future


Investors fear Lyft does not have a plan to profitability, however revenue for the quarter beat analyst expectations.

Lyft exceeds revenue expectations, but losses keep mounting as the company lacks focus and a plan to pare future slow downs and price increases that may keep customers away from the company for its competition.

Earnings season is still upon us and on Tuesday Lyft's 4th quarter earnings beat Wall Street's analyst's expectations, but investors were left scratching their heads about the slow growth warning by the company. This has made investors very uneasy as the company continues to loss money. The company has also warned investors that they believe that they are heading into a slowdown in 2020

Lyft’s revenues came in at $1.02 billion ahead of the analyst estimates of $985.8 million. However, the adjusted EBITDA came in at $130.7 million well under the estimates of $162 million. Even though they beat on revenue the company did advise of a slowdown in growth and had no plan to counteract the possible slow down. Investors showed disapproval as the stock was down in after-hours trading.

For the quarter, Lyft had 22.9 million active riders, a 23% jump year over year. Revenue per active rider also grew in-step to $44.40, the company said. Investors, who were waiting for the company's detailed plan to take on their competitors and the road to profitability as their net losses came in at $356 million for the quarter. Lyft's losses continued to mount as their Q418 net loss was $249 million.

"Despite shares down on the print before the conference call we view this as a continuation of Lyft delivering across the board strength every quarter since it's become a public company," Daniel Ives, an analyst at Wedbush. The absence of a profitability plan for Lyft has left investors unimpressed as competitor Uber did have a plan for future growth.

The company on its way to profitability is cutting the subsidies that have made their rides cheaper and need to raise prices as Lyft needs to continue to beat the expectations of analysts every quarter. The companies must realize that they have much different goals now that they are public.

“Fiscal 2019 was an exceptional year across the board," Logan Green, Lyft's chief executive, said. "We significantly improved our path to profitability while simultaneously reaching critical milestones toward our long-term strategy."

Read more here


Economics, Finance and Investing