Friday, Sep 20, 2024

Lyft plunges 18% after disappointing 3rd-quarter earnings suggest Uber is taking share from the ride-hailing company

  • Lyft plunged 18% after its third-quarter earnings report missed investor expectations on revenue and ridership.
  • The weakness suggested that Uber is taking market share away from the ride hailing company.
  • "We believe Uber has done a much better job at rebuilding driver supply, likely leaving Lyft with a structurally smaller share of the market than it had pre-pandemic."

Shares of Lyft plunged 18% on Tuesday after the company's third-quarter earnings report missed investor expectations on revenue and ridership.

The weak results came on the heels of a solid earnings report from Uber last week, suggesting that Lyft is losing market share to its larger rival.

Here were the key numbers of Lyft's earnings report:

Revenue: $1.05 billion versus estimates of $1.06 billion
Adjusted EBITDA: $66.2 million, versus estimates of $62.1 million
Total Active Riders: 20.3 million, versus estimates of 21.2 million

While Lyft saw a decline in total active riders, Uber saw a more than 20% surge in active riders last quarter, bolstering the idea that Uber is taking share from Lyft.

"We believe Uber has done a much better job at rebuilding driver supply, likely leaving Lyft with a structurally smaller share of the market than it had pre-pandemic," Atlantic Equities analyst James Cordwell said.

Tuesday's decline sent shares of Lyft within reach of testing its all-time low of $10.83. The stock traded at $11.68 in early Tuesday trades.

According to Wedbush analyst Dan Ives, Lyft could still see upside as consumers return to travel and head back into the office in a post-pandemic period. He maintained an "Outperform" rating on Lyft but lowered his price target to $17 from $25.

"We believe that this is a short-term headwind and the company will continue to grow its profit margins throughout FY23. In a nutshell, we believe while this was a modestly disappointing quarter for Lyft, we believe as consumers continue to return to travel, shifting to the office, and other post-pandemic trends take hold Lyft will continue to capture market share in North America heading into 2023," Ives said.

Read the original article on Business Insider
------------
Read More
By: [email protected] (Matthew Fox)
Title: Lyft plunges 18% after disappointing 3rd-quarter earnings suggest Uber is taking share from the ride-hailing company
Sourced From: markets.businessinsider.com/news/stocks/lyft-stock-price-3q-earnings-suggest-uber-taking-market-share-2022-11
Published Date: Tue, 08 Nov 2022 15:02:17 +0000

Did you miss our previous article...
https://trendinginbusiness.business/business/oil-prices-could-once-again-soar-to-125-a-barrel-in-2023-if-china-ends-its-covid19-lockdown-policy-goldman-sachs-says