Why Is Lyft (LYFT) Down 25.3% Since Last Earnings Report?

A month has gone by since the last earnings report for Lyft (LYFT). Shares have lost about 25.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Lyft due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Lyft Beats on Revenues in Q2

Lyft incurred a loss of 68 cents per share in second-quarter 2019 (excluding $1.55 from non-recurring items), narrower than the Zacks Consensus Estimate of a loss of $1.03. Results were aided by solid revenues that grew 72% on a year-over-year basis to $867.3 million. The top line also surpassed the Zacks Consensus Estimate of $809.4 million.

Revenues for 2019 are now expected between $3.47 billion and $3.5 billion (earlier guidance was between $3.275 billion and $3.3 billion). Following the raised guidance, top-line growth is now expected in 61-62% range for 2019 (earlier forecast hinted at a 52-53% revenue growth). Anticipation of solid rider growth led to the company’s upbeat revenue forecast. Lyft now anticipates EBITDA loss (adjusted) for 2019 in the $850-$875 million band, mirroring an improvement from the earlier guidance of a loss of $1.175-$1.15 billion.

Q2 Highlights

Active Riders (riders who take at least one ride during a quarter on Lyft’s multimodal platform through its app) in the quarter under review increased 41% year over year to 21.8 million. Revenue per Active Rider increased 22% to $39.77 at this San Francisco-based company.

Adjusted EBITDA loss for second-quarter 2019 was $204.1 million compared with a loss of 190.5 million incurred a year ago. The adjusted EBITDA margin improved to 24% in the reported quarter from 38% in the second quarter of 2018.

Contribution improved 88% year over year to $398.9 million. Contribution margin expanded to 46% from 42.1% a year ago. Lyft exited the second quarter with unrestricted cash of $3.3 billion compared with $2.03 billion at 2018 end.

Q3 Outlook

Lyft expects revenues between $900 million and $915 million, reflecting year-over-year growth between 54% and 56%. Adjusted EBITDA loss is anticipated in the $190-$210 million range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 12.09% due to these changes.

VGM Scores

At this time, Lyft has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Lyft has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Lyft, Inc. (LYFT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research