Lyft's Stock Falls After Revenue And Passenger Misses

On Monday, ride-hailing startup Lyft Inc (NASDAQ:LYFT) forecast current-quarter revenue below Wall Street estimates as user growth on its platform slowed, falling behind bigger rival Uber Technologies Inc (NYSE:UBER) and sending its shares down 13%.

According to FactSet, Lyft's active riders climbed by 7.2% to 20.3 million in the third quarter, which was the year's slowest quarterly growth and fell short of the consensus estimate of 21.3 million.

However, revenue per active rider increased by 13.7% to $51.88, representing the highest increase compared to the previous two quarters.

Uber holds a greater percentage of the ridesharing sector, has international operations, and revenues from its food delivery business.

After Uber reported a lucrative quarter and said last week that it was not seeing any signs of a consumer slump, there were high hopes for Lyft.

Rider expansion for Lyft is slowing.

"Lyft is losing market share to Uber because it lacks the cross-platform offering Uber has established with ride-sharing and Eats," said Nicholas Cauley, an analyst at Third Bridge.

On a post-earnings conference call, Lyft executives advised analysts that they were not observing any worrisome macro patterns heading into the fourth quarter, and that they were relying on cost-cutting measures and demand to enhance profitability and growth.

John Zimmer, the president of Lyft, said in an interview, "Historically, in a recessionary context, transportation is more resilient than delivery and takeout because we need to move about."

According to Refinitiv IBES statistics, the company expects fourth-quarter revenues between $1.15 billion and $1.17 billion, while analysts predict $1.17 billion.

As the company pays for driver insurance in the current quarter, it expects growing insurance prices to have a negative impact.

The business expected adjusted EBITDA (profits before interest, taxes, depreciation, and amortization), a profitability measure frequently monitored by investors, to range between $80 million and $100 million, compared to the $84.5 million predicted by analysts.

An analyst at D.A. Davidson, Tom White, said, "It's more of a cost-cutting victory than a growth one."