2:24 PM, May 7, 2019 — Lyft (LYFT) will release its first quarterly earnings report after the ridesharing company went public in late March, and analysts are looking for signs that could stabilize its sagging stock price.
San Francisco-based Lyft’s shares began trading on March 28 at an initial price of $72 each. The stock has been well below that level in the weeks since, and were at $60.08 in early afternoon trading on Tuesday.
Canaccord Genuity said in a note that it expects the market to look closely at Lyft’s strategy and core message to investors, a guide path on active rider growth and engagement and remarks about the industry landscape after “sizeable market share gains” made during 2017 to 2018. The firm has a buy rating and a $75 price target on Lyft.
But Wedbush Securities last week cut its price target to $67 from $80 a share.
“Let’s not sugarcoat it, Lyft’s stock has been a head-scratching train wreck since the IPO and is still down ~15% since coming out of the box with other key tech IPOs (Pinterest, Zoom) showing a very strong performance thus far in the eyes of tech investors,” Wedbush said in a note last week.
The firm said Lyft as a “major opportunity” to begin to build credibility with investors as it tries to capitalize on a $1.2 trillion market for ridesharing in the coming years. Wedbush lowered its view on Lyft’s revenue to $743 million from $757 million, but that’s still ahead of the Capital IQ consensus of $737.9 million. Meanwhile, Capital IQ expects Lyft to report a loss of $1.07 per share.
Canaccord expects active rider growth of 40% year on year and growth of 10% for bookings per active rider. It also sees “a modest increase in revenue as a percent of bookings (29.1% versus 28.7% in 4Q) driving total y/y revenue growth of 87.5%,” adding that it expects adjusted earnings before interest, tax, depreciation and amortization margin of minus 33.7%.
Canaccord also said it would be looking on cost-cutting opportunities, especially relating to insurance as well as an update on Lyft’s bike and scooter deployment.