Shares of Lyft (LYFT) fell around 4% in early trading on Wednesday despite the ride-hailing company delivering better-than-expected results driven by rising demand across its network. The company’s revenues declined 36% year-on-year to $609 million in 1Q but still came in ahead of analysts’ estimates of $558.2 million.
Lyft reported a non-GAAP adjusted net loss of $0.35 per share versus an adjusted loss of $0.32 in the same quarter of last year. Analysts were expecting a loss of $0.60 per share.
Lyft’s co-founder and CEO, Logan Green said, “The improvements we’ve made over the last year are paying off – we’ve built a much stronger business. As the recovery continues, we are confident that we will be able to deliver strong financial results. We expect to build a significantly larger company by attacking the trillion dollar plus market opportunity in front of us.”
In the first quarter, Lyft’s active riders rose 8% quarter-on-quarter to 13.5 million as riders returned to work and new rider activations increased, specifically in the month of March. The company’s revenue per active rider dipped around 1% year-on-year to $45.13 in the first quarter. (See Lyft stock analysis on TipRanks)
Lyft said on its earnings call that it expects second quarter revenues to range between $680 million and $700 million indicating year-on-year growth of between 100% and 106%. Lyft expects contribution margin to land between 56.5% and 57.5% and adjusted EBITDA loss to be limited to between $35 million to $45 million.
Following the earnings, Monness Crespi Hardt analyst Brian White reiterated a Hold on the stock. White said in a research note to investors, “Lyft report solid 1Q:21 results with expectations for this recovery to gain momentum. Within our coverage universe, Lyft has experienced the most pronounced impact from this crisis; however, the company also holds the potential of being the most significant beneficiary as the U.S. economy continues to reopen.”
Consensus on the Street is that Lyft is a Moderate Buy based on 22 Buys and 10 Holds. The average analyst price target of $71.68 implies 31.5% upside potential.
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