Shares sink after missing Q1 2023 guidance

Lyft (LYFT) reported its fourth quarter 2022 earnings on Feb. 9 after the market closed.

The San Francisco-based company beat key metrics, such as revenue and the number of active riders, but missed analyst estimates for Q1 2023 revenue. Lyft shares tumbled 19% in trading after -hour.

Here’s what the ride-hailing company reported, compared to estimates compiled by Bloomberg:

Q4 Revenue: $1.18 billion actual versus $1.16 billion expected

Fourth quarter loss per share: – $1.61 actual versus 13 cents expected

Active pilots Q4: 20.36 million effective against 20.3 million expected

Q1 revenue guidance: $975 million actual versus $1.09 billion expected

It was widely anticipated that this would be a tough earnings cycle for Lyft. The company was recently downgraded from Buy to Hold by Gordon Haskett analyst Robert Mollins, who cut his price target for the stock from $24 to $19, citing concerns about app downloads and increased competition from part of rival Uber (UBER). However, the company is also poised to benefit from a recovering rideshare market.

“The improved market balance we see today creates significant opportunities for long-term profitable growth,” Lyft co-founder and CEO Logan Green said in a statement. “To take advantage of this opportunity we need to ensure competitive service levels.”

PARK CITY, UTAH - JANUARY 23: General view of Lyft signage during the Sundance Film Festival on January 23, 2023 in Park City, Utah.  (Photo by Mat Hayward/Getty Images)

PARK CITY, UTAH – JANUARY 23: General view of Lyft signage during the Sundance Film Festival on January 23, 2023 in Park City, Utah. (Photo by Mat Hayward/Getty Images)

“We are focused on driving higher growth and profitability”

However, there have been remarkably bright spots in Lyft’s release, particularly when you consider its trajectory. For example, the company’s fourth-quarter revenue was up 21% year over year, while its active ride count was up nearly 9% year over year.

“In the fourth quarter, we delivered the highest revenues in our company’s history and outperformed guidance on Adjusted EBITDA excluding the actions we took to strengthen our insurance reserves,” Lyft CFO Elaine Paul said in a statement. “Our Q1 forecast is a result of seasonality and lower prices… We are focused on driving higher growth and profitability.”

Lyft’s lack of gaping EPS is related to how the company’s insurance renewal played out, which Paul also referenced in the release. “Our differing insurance renewal timing puts pressure on our income statement at different times. We are not waiting for it to normalize to achieve competitive service levels.”

For its part, Uber reported its fourth-quarter earnings on Feb. 8, delivering key pace in both revenue and delivery bookings. The company’s $8.61 billion fourth-quarter revenue represented a 49% year-over-year jump. Shares of Uber were up about 5% during the day yesterday, falling slightly in after-hours trading.

Allie Garfinkle is Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and go LinkedIn.

For the latest earnings reports and analysis, earnings whispers and expectations, and corporate earnings news, click here

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple OR Android

Follow Yahoo Finance on Chirping, Facebook, Instagram, Flipchart, LinkedInAND Youtube

Leave a Reply

Your email address will not be published. Required fields are marked *