5 Lyft Analysts React To Q1 Earnings: 'Uber Seemingly Pulling Away'

LYFT Inc (NASDAQ: LYFT) shares were tumbling Friday after the company reported disappointing first-quarter numbers as it struggles to keep pace with rival Uber Technologies Inc (NYSE: UBER).

On Thursday, Lyft reported adjusted first-quarter EPS of 7 cents, beating consensus analyst estimates of a 6-cent loss. Lyft reported first-quarter revenue of $1 billion, beating analyst expectations of $981 billion. Revenue was up 14% from a year ago.

Lyft reported 19.5 million active riders in the first quarter, up 9.8% from a year ago. Revenue per active rider was $51.17, up 4% year-over-year.

Related Link: Lyft Q1 Earnings Highlights: Revenue And EPS Beat, Guidance Disappoints And More

Looking ahead, Lyft guided for second-quarter revenue of between $1 billion and $1.02 billion, short of Wall Street projections of $1.08 billion.

Taking On Uber: Truist analyst Youssef Squali said Lyft's lackluster guidance and lack of long-term financial clarity makes the stock a risky investment at this point.

"LYFT remains a [work in progress] and a show me story with UBER seemingly pulling away," Squali wrote.

Needham analyst Bernie McTernan said Lyft's recent price cuts likely gained the company market share from Uber.

"Following another negative estimate revision estimates are likely closer to finding a bottom, but there is still a high degree of uncertainty of the level of economics of the US rideshare market that will flow to the number 2 player," McTernan wrote.

Bank of America analyst Michael McGovern said it's difficult to see margin upside for Lyft in the near term.

"Though mgmt. reports that 3P data sources show Lyft at 30%+ share in April, revenue growth & margin are likely impacted by lower pricing/surge rates in the near term," McGovern wrote.

Related Link: What's Going On With Uber Stock Thursday

Profits Or Market Share? RBC analyst Brad Erickson said Lyft is stuck between a rock and a hard place.

"After consistently losing share for over a year while also seeing structural margin headwinds, its recent price reductions are likely helping its market share but weighing incrementally on margins," Erickson wrote.

D.A. Davidson analyst Tom White said new Lyft CEO David Risher has some positive updates on the company's pricing adjustments and service investments.

"Risher certainly seems to bring some fresh energy/perspective to LYFT, but it remains too early for us to have conviction that LYFT's recent pricing adjustments, new marketing tactics, or likely future product innovations/tactics will lead to sustainable meaningful growth and margin expansion," White wrote.

Ratings And Price Targets:

• Truist has a Hold rating and cut the price target from $14 to $10. 
• Needham has a Hold rating.
• Bank of America has an Underperform rating and lowered the price target from $10 to $8.50. 
• RBC has a Sector Perform rating and lowered the price target from $11 to $9.
• D.A. Davidson has a Neutral rating and cut the price target from $12.50 to $9.75.

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