Lyft shares fall 8% as management comments overshadow earnings beat

Investing.com -- LYFT Inc (NASDAQ: LYFT) shares fell nearly 8% in early Wednesday trade despite the ride-hailing company beating expectations for the second quarter and providing better than forecast guidance.

While shares rose initially, they quickly fell on cautious management commentary.

Adjusted earnings per share of 16 cents beat expectations for a 1 cent per share loss in the quarter. Revenue of $1.02 billion matched the consensus estimate.

Lyft sees third quarter revenue of $1.13B to $1.15B, which is higher than Wall Street estimates.

CEO David Risher said: “Between summer travel and return-to-office commuting, folks are getting out more every day and loving the Lyft rideshare experience. Standard rides have reached their second-highest level ever.”

The company reported adjusted earnings before interest, taxes, depreciation, and amortization of $41 million, which is higher than its guidance for $20M to $30M.

Active riders rose 8.2% to 21.5M. The company sees third quarter adjusted Ebitda of between $75M and $85M.

Bernstein analyst Nikhil Devnani said the results show that headwinds facing Lyft's business still persist.

"Those Y/Y headwinds will persist through 2023, and Q4 has added challenges of insurance cost rising that will pressure the run-rate margins of the business. Nonetheless, we appreciate management getting out ahead of the tough Q4 set-up and offering some rough guidance. The attention can now shift to 2024, where revenue growth should re-accelerate towards trip growth (assuming stable pricing and take rate), but the underlying earnings power and FCF generation of the model remain outstanding questions," the analyst said.

Susquehanna analyst Shyam Patil added that the management commentary about second-half of the year led "to another noisy report."

"It appears that LYFT’s competitive pricing initiative will continue to weigh on the unit economics, and the upcoming insurance renewals could add some noise on the cost side later in the year. Given these issues and potential for near-term turbulence, we remain Neutral."

Additional reporting by Senad Karaahmetovic

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