What's going on?
Investors pulled further away from Lyft’s stock on Wednesday, sending it 6% lower despite the US ride-hailing company reporting better-than-expected quarterly results.
What does this mean?
In its first update since becoming a public company in March, Lyft revealed that its revenue last quarter almost doubled compared to the same time last year – and that, excluding one-off costs related to its initial public offering, it reduced its losses too, zooming past analysts’ estimates.
Lyft’s pumping the gas, but perhaps not hard enough. The company’s revenue forecast for this quarter is higher than analysts predicted – but Lyft is still forecasting its revenue growth will slow by around a third compared to the quarter just gone (tweet this). And with losses predicted to grow once again, profit is still a long ride away…
Why should I care?
For markets: Little reason for Lyft-off.
Lyft’s stock has fallen 20% since going public, with some investors now claiming the company misrepresented itself in order to attract their cash. And a better-than-expected earnings report wasn’t enough to encourage investors to lift the company’s shares on Wednesday. While the investment bank analysts who recommend shares to investors were impressed, their forecasts typically follow a company’s earnings guidance closely, allowing it to underpromise and subsequently overdeliver; the investors themselves may have had higher expectations. That may help explain why some 44% of Lyft’s listed shares are being used by investors (including existing backers) to bet that their price will fall, according to Bloomberg.
The bigger picture: Your robot is arriving shortly.
Lyft announced late on Tuesday that Alphabet-owned Waymo’s driverless cars will be rolled out for rides in the next few months. After testing its robo-taxi service in Phoenix, Arizona, Lyft plans to start with 10 robocars in the city – similarly to its previous Las Vegas partnership with Aptiv. Arch-rival Uber (hitting stock markets on Friday) also has its eye on expensive self-driving taxis – but is yet to make a major breakthrough.