Lyft (LYFT) Q2 Results Better Than Expected But the Stock Price Is Still In the Red Post-IPO
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August 08, 2019
Lyft (LYFT) stock climbed 13% after hours but gave up early gains after the company announced share lock-ups would expire on August 19, 2019, rather than a previously scheduled date in September.
Second most popular ride-hailing platform in the U.S., Lyft (LYFT) announced their Q2 results. Their loss per share was pretty much less than expected – $0.68 adjusted, and expected was $1.74. Their revenue was $867 million that is more than $809 million expected. At the time of writing the stock was up 2.71% to $60.29.
Company’s stocks rose up 13%. However, they gave up early gains after the company announced share lock-ups would expire on August 19, 2019 that is a bit earlier than September, as previously said. The company assigned the shift to a blackout period around its next quarterly results. Lyft’s stock gave up nearly all of its gains after the disclosure.
From the company they said they expect the yearly revenue to rise, driven by strong rider growth, for more than a $3.5 billion, that is around $200 million higher than it previously resumed. At the same time, Lyft now expects its yearly loss to be $875 million at the high-end, that represents $300 million less than previously expected.
Lyft CEO Logan Green praised the company’s improved financial outlook to stronger than expected revenue growth as well as “efficiencies” in its sales and marketing efforts. He said that this was a milestone quarter on their path to profitability.
Chief financial officer, Brian Roberts confirmed that they are focused on “trying to win on brand preference and experience – not coupons.”
There were some dislikes about riders in multiple cities paying higher prices. The “price adjustments” started in June following a long period of lower prices to win a bigger customer base in the lead-up to the company’s initial public offering in March.
Roberts added that these price adjustments obviously reflect an industry trend, suggesting to a cooling price war with its biggest rival Uber whose executives said earlier this year that it appeared that a longtime price war in the ride-sharing industry might be waning.
“We are focused on driving profitable growth, not growth at all costs.”
Wall Street seem to like these results because they showed up pretty optimistic. However, after Lyft made its public market debut in March, raising about $2.3 billion from their IPO, its shares in Lyft went down more than 15% from its IPO price, prior to its second-quarter update.
From JPMorgan, they advised their clients that the key on the call will be updated on incentive spending and the competitive environment in U.S. ridesharing, with detail on market share gains. They said:
“As the industry moves to a focus on product differentiation instead of price, we will look for more commentary on the impacts Lyft’s recent product initiatives (matching platform, shared saver, etc.) have had on fueling growth.”
Investors and analysts will be looking at active riders as a key measure of Lyft’s continued growth. JPMorgan expects that number to come in at 21.3 million.
Like Uber, its main challenger, Lyft is aiming to construct its mobility business to more than just a ride-hailing. It also acquired Motivate, and its bike-sharing network, and deployed electric “dockless” bikes, and scooters in North American cities.
Some analysts think that there are some showings that Lyft may be catching Uber in some way, at least considering the U.S.
Data from eMarker show that Uber’s powerfulness on the US ride-hailing app market has dropped to 76%. Lyft, on the other hand, went growing by 50% by the same measure for the first time. Uber is set to report its quarterly earnings Thursday.