- REUTERS/Mike Blake
- Lyft is set to report its second-quarter earnings on Wednesday afternoon.
- Wall Street expects the company to lose about $1.70 per share on revenues of $309 million.
- Analysts say the company is competing less with Uber on price and more on experience these days, which should help both become profitable.
- Lyft has continued to steal some US market share from Uber, data from eMarketer show.
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Lyft will report its second-quarter earnings following the closing bell Wednesday afternoon.
Wall Street analysts expect the ride-hailing company to lose a whopping $300 million, according to a Bloomberg poll, on revenues of $809 million. On a per-share basis, that operating loss would translate to about $-1.02.
Like Uber, its biggest competitor, Lyft is racing to pare those steep losses and become profitable. However, that goal is at odds with its fight for market share, which is largely won throughout the country by heavily discounted prices for its rides.
There’s some evidence that Lyft may be catching Uber, at least in the United States. Data fom eMarker show that Uber’s stranglehold on the US ride-hailing app market has dropped to 76% (though there’s likely some overlap, with customers who use both). Lyft, meanwhile, has topped 50% by the same measure for the first time.
Luckily for both companies, the price wars seem to have mostly gone by the wayside, Wall Street analysts say, with the new competition coming down to a better ride experience.
“Key on the call will be updates on incentive spending and the competitive environment in U.S. ridesharing, with detail on market share gains,” JPMorgan told clients this week. “As the industry moves to a focus on product differentiation instead of price, we will look for more commentary on the impacts Lyft’s recent product initiatives (matching platform, shared saver, etc.) have had on fueling growth.”
Investors and analysts will be looking at active riders as a key measure of Lyft’s continued growth. JPMorgan expects that number to come in at 21.3 million.
Then there’s the bikes question.
- Courtesy of Zach Rutta
Although Lyft has declined thus far to break out specific metrics on its bike and scooter sharing services, analysts and the company see the products – which are in most of the US’ biggest cities – as a key pipeline to adding new riders into the Lyft ecosystem.
However, newly relaunched electric bikes in San Francisco were pulled once again from streets last week after at least two of the vehicles caught fire. The new “Bay Wheels” e-bikes have also launched elsewhere in the Bay Area, with more cities planned.
“We note that Lyft is continuing to invest heavily in its bikes & scooters business, with a significant ramp in 2Q/3Q given the warmer weather,” JPMorgan said.
Lyft’s stock price is still in the red post-IPO
Shares of Lyft have failed to rise above their initial trading prices after hitting public exchanges in March. The stock was trading at $60 Wednesday morning, about 31% lower than the $87.24 hit on the first trading day.
Despite the plunge, Wall Street remains optimistic about the stock, with 21 analysts polled by Bloomberg rating the stock as a “buy.” 12 others recommend clients “hold” the stock, and another three rate it a “sell.” Their average price target is $69.86, a 19% premium over current prices.
Last month, Lyft lost its head of operations Jon McNeill, who joined the company in February 2018. In a regulatory filing, the company said it doesn’t plan to replace him in the position and will divvy up his duties among other executives.
“We believe McNeill’s departure, after only 18 months, is a negative for Lyft,” JPMorgan said of his departure. “We believe McNeill was widely viewed as an important figure at Lyft given his automotive expertise and industry experience.”