Lyft (NASDAQ:LYFT) stock initially spiked over 14% in extended trading yesterday when the company’s second-quarter earnings surpassed expectations. However, shares of the ride-hailing service provider lost momentum later and ended down by 6.7%. LYFT stock has gained nearly 4% so far in 2023.
Lyft faces stiff competition from the leading ride-hailing service provider. Uber Technologies (NYSE:UBER). Both companies are engaged in a tough pricing war to attract a higher number of riders. While Uber has managed to remain profitable, Lyft has a long way to go to generate positive net income.
Details of Lyft’s Q2FY23 Results
Lyft surprised investors with a handsome adjusted profit of $0.16 per share, while Wall Street had expected an adjusted loss of $0.01 per share in the quarter.
Moreover, Lyft’s revenues came in line with expectations at $1.02 billion, growing 3% compared to the prior year period.
Remarkably, the number of active riders on Lyft rose 8.2% year-over-year to 21,487. Nonetheless, revenue per active rider fell 4.8% to $47.51 compared to the year-ago period.
Based on the solid ridesharing momentum witnessed in Q2, Lyft expects Q3FY23 revenues to come in the range of $1.13 and $1.15 billion (up 7% to 9% year-over-year). This revenue growth will be achieved with an expected 20% year-over-year growth in rideshare rides. Also, adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) is forecasted to be between $75 and $85 million.
Is LYFT a Buy, Sell, or Hold, According to Analysts?
Following the Q2 print, Goldman Sachs analyst Eric Sheridan reiterated a Buy rating on LYFT stock while lifting the price target to $13 (12.5% upside potential) from $12.
Sheridan is encouraged by Lyft’s Q3 guidance, which is better than both the Street’s ($1.09 billion) and his own estimates of $1.05 billion.
Overall, on TipRanks, Lyft has a Hold consensus rating based on one Buy, 11 Holds, and one Sell rating. The average Lyft price forecast of $11.02 implies 4.7% downside potential from current levels.
