Lyft crashes 30% on weaker guidance, surprise loss in Q4; earns several downgrades
Investing.com -- Lyft reported Thursday a surprise fourth-quarter loss and guidance that fell short of Wall Street estimates as margins were pressured by rising costs.
LYFT (NASDAQ: LYFT) is down more than 30% in pre-market hours.
Lyft reported a loss of $0.74, missing estimates for earnings of $0.15 a share, but revenue of $1.18 billion just topped consensus estimates of $1.16B.
Active riders on its platform jumped 8.7% to 20.4 million in the fourth quarter from the same period last year, while revenue per active rider increased 11.5% to $57.72 year-over-year.
The contribution margin fell to 35.3% from 47.1% in the quarter.
For Q1, the ride-hailing company guided revenue of $975M, but that was lower than Wall Street estimates for $1.10B.
"Our Q1 guidance is the result of seasonality and lower prices, including less Prime Time," the company said.
A selloff accelerated in pre-market hours after several analysts slashed their ratings on LYFT stock. KeyBanc analyst Justin Patterson cut to Sector Weight as results "cast uncertainty on our view of improving execution and a profit inflection."
"With ~2/3 of the q/q decline in revenue coming from less Prime Time activity and reducing prices to match its competitor, we have more questions on whether revenue can achieve mid-to-high teens growth in 2023E. Coupled with more uncertainty on LT targets and category share, we acknowledge we were early on our thesis," Patterson said.
Truist Securities analysts also slashed their rating on LYFT, going to Hold from Buy with the price target of $14 (from $40). The move lower on the rating scale reflects reduced growth and margins outlook as Lyft loses market share to Uber.
By Yasin Ebrahim and Senad Karaahmetovic