The Ratings Game: Lyft stock melts down after earnings ‘debacle for the ages’

by | Feb 10, 2023 | Stock Market

Lyft Inc. isn’t getting too many stars for its latest earnings report, which helped send shares down more than 36% Friday as numerous bulls head for the hills and fret about the company’s struggles to compete against rival Uber Technologies Inc. While the ride-hailing company topped revenue expectations for the latest quarter, it fell short in its top-line outlook and delivered a messy outlook for adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) that came in below the consensus view but also reflected accounting changes in how the company treats insurance reserves.

In addition, Chief Executive Logan Green said that Lyft’s
work to “prioritize competitive service levels” will impact its prior 2024 targets for free-cash flow and adjusted Ebitda. Lyft shares ended Friday trading at $10.31, down 36.4%, their largest percent decrease on record. It was also the stock’s lowest close since Dec. 28, 2002, when it closed at $10.12. The company’s shares have decreased almost 75% in the past year. Analysts were blunt with their takes following the report, which brought concerns about the company’s positioning and its ability to drive profits. At least eight analysts downgraded the stock after earnings, according to data from FactSet. “In 22 years on the Street as a tech analyst we have listened to 1,000s of conference calls with many highs and lows,” wrote Wedbush analyst Daniel Ives. “Last night’s Lyft call was a Top 3 worst call we have ever heard as in our opinion as management is trying to play darts blindfolded with the expense structure going forward and gave an Ebitda outlook which was a debacle for the ages.” He added that “Lyft’s business model faces an Everest-like uphill cl …

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