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Lyft (LYFT) Q3 Loss Narrower Than Expected, 2019 View Up

Zacks Equity Research

Lyft LYFT incurred a loss (excluding $1.16 from non-recurring items) of 41 cents per share in third-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of 71 cents. Results were aided by solid revenues that soared 63.4% on a year-over-year basis to $955.6 million, courtesy of robust growth in Active Riders and Revenue per Active Rider. The top line also surpassed the Zacks Consensus Estimate of $913.2 million. Notably, this was the third earnings report for Lyft since going public on Mar 29.

Active Riders (riders who take at least one ride during a quarter on Lyft’s multimodal platform through its app) in the quarter under review increased 28% year over year to 17.39 million. This San Francisco-based company’s Revenue per Active Rider rose 27% to $33.63 million.

Adjusted EBITDA loss for the third quarter was $128.1 million compared with a loss of $263.2 million incurred a year ago. The adjusted EBITDA margin came in at -13.4% in the reported quarter compared with -45% in the third quarter of 2018.

Contribution improved 82% year over year to $479.2 million. Contribution margin expanded to 50.1% from 45% a year ago. Lyft exited the third quarter with unrestricted cash (cash and cash equivalents +short-term investments) of $3.11 billion compared with $2.04 billion at 2018 end.

Q4 Outlook

The company anticipates revenues between $975 million and $985 million in the fourth quarter, indicating a year over year surge of 46-47%. The mid-point (approximately $980 million) of the guided range is above the Zacks Consensus Estimate of $941.82 million. Adjusted EBITDA loss is now anticipated to be $160-$170 million, better than a loss of $240-$245 million expected previously.
2019 Outlook

For 2019, revenues are estimated in the range of $3.57-$3.58 billion, implying an approximate 66% year over year rise (previous view: $3.47-$3.50 billion). The mid-point (approximately $3.58 billion) of this guided range is above the Zacks Consensus Estimate of $3.5 billion. Additionally, adjusted EBITDA loss is forecast in the band of $708-$718 million, suggesting an improvement from the prior guidance of $850-$875 million. The company expects to earn profits in terms of Adjusted EBITDA in the fourth quarter of 2021.

Zacks Rank & Other Key Picks

Lyft carries a Zacks Rank #2 (Buy). Some other top-ranked stocks in the same space are Inc. SOHU, HealthStream, Inc. HSTM and Akamai Technologies, Inc. AKAM. While and HealthStream sport a Zacks Rank #1 (Strong Buy), Akamai Technologies carries the same Zacks Rank as Lyft. You can see the complete list of today’s Zacks #1 Rank stocks here. has an impressive earnings history, having surpassed the Zacks Consensus Estimate in three of the preceding four quarters. Meanwhile, shares of HealthStream and Akamai Technologies have rallied more than 16% and 41%, respectively, so far this year.

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