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What Lyft Investors Are Weighing After Earnings

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Lyft  (LYFT) - Get Free Report shares were up and down after a mixed earnings report, but one that included management commentary on the future that paints a positive picture for profitability. Negatively, the top-line results still point to uncertainty on the expected sharp rebound. 

The stock initially rose 1% to $30.85 a share in postmarket trading. But the stock entered the print battered, down 25% since June 8 and trading at just over two times 2021 revenue estimates, the year in which analysts expect a rebound to pre-COVID-19 levels of ride activity and revenue. 

That’s not an incredibly expensive valuation for a growth stock and it is a discount to Uber  (UBER) - Get Free Report, which has the explosively growing business of food delivery to lean on. Lyft management's comments that it can still reach profitability on schedule even with lower ride volumes is a positive for the stock, which did fall 2% closer to 5 pm EDT. 

Here were the results against Wall Street expectations: 

  • Revenue: $339M v. $339M (actual result: -60% year-over-year)
  • Total Riders: 8.69M v. 9M (-60%) 
  • Revenue Per Active Rider: $39 v. $38.2 (-1.9%) 
  • Adjusted EBITDA: -$280M v. -$291M (last year: -$204M) 
  • EBITDA Margin: -82 v. -85% (Last Year: -23%) 
  • GAAP Loss Per Share: $1.41 v. $1.53 (last year: 68 cents)

Lyft said it has recently seen 78% rideshare ride growth over the month of April and is encouraged on the speed of the recovery. As for profitability, which came in better-than-expected on account of cost controls rather than strength in the top-line, here’s what management said: 

"In Q2, we successfully limited our Adjusted EBITDA loss, outperforming the outlook we shared on our Q1 call by more than 20%. We continued to take aggressive actions to reduce costs and increase our underlying unit economics in the quarter, which has put Lyft on track to achieve $300 million of annualized fixed cost savings by the end of the year. These steps position the Company to achieve adjusted EBITDA profitability with 20 - 25% fewer rides than originally contemplated in our fourth quarter 2021 target.”

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