Lyft Grows Ridership, Beats Revenue Estimate In Q4, But Stock Drops

Lyft Inc. announced Tuesday after market financial results for its fourth quarter and fiscal year ended

Lyft Inc. announced Tuesday after market financial results for its fourth quarter and fiscal year ended

In bigger US cities, such as San Francisco, the ride-hailing market is much bigger than the traditional taxi market.

This day we are digging into Lyft's earnings results, interrupting the corporation's performance, the economy's expectations and why stocks in the American ride-hailing giant are away from after-hours trading. It's about strategy, discipline and making money now. Corporate clients tend to ride often, and the business is considered high-growth and high-margin. The company reported that Uber's Rides accounts for more than ¾ of the business' increased generated income in the Q3 2019. Its ride-sharing business has become profitable, but other segments of the business are dragging the company down. Moreover, Uber's management moved the key profitability goal from Q1 next year to the fourth-quarter of this year. Lyft's rally of more than 25% this year - along with Uber's recent results - raised the bar for Tuesday's report. For the entire past year, Uber reported a loss of $8.51 billion.

Active riders increased to 22.9 million, up 23% from a year ago, with revenue per active rider rising 23%, to $44.40.

Lyft was founded in 2012 with the goal being to "improve people's lives with the world's best transportation". Similarly to Uber, Lyft earns money by taking a cut from the fares i.e. 20%. Benchmark issued a report stating that Lyft's costs of insurance are rising since 2016 and are projected to reach $600 million in 2020 so analysts surely expect this to affect the company's bottom line this year.

Despite beating analyst predictions in its fourth-quarter earnings Monday, shares in Lyft Inc. dropped in after-hours trading after the company failed to move up its profitability timeline as rival Uber Technologies Inc. did February 6.

Lyft said its annual revenue grew to USD3.62 billion, up from USD2.16 billion in 2018.

Lyft reported Contribution for Q4 2019 of $549.5 million versus $304.7 million in the fourth quarter of 2018, up 80% year-over-year. Net loss came in at $256 million versus $248.9 million year-over-year, with Lyft noting that the figure included $207.3 million of stock-based compensation and related payroll tax expenses.

He said Lyft will continue working hard to encourage additional drivers to join their community so they can continue to expand and serve riders and drivers where they are.

"This is our strategy and our focus on profitable growth coming to life", co-founder and CEO Logan Green said on a conference call with analysts. Even though Lyft's stock has recovered from lows place in October, 2019, the organization's equity is now more than $20 down from its IPO price, taking into consideration its own post-earnings movement. Even so, the stock remains rated Buy or Strong Buy by 24 of 36 analysts.

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