Lyft to report second-quarter earnings from pandemic-depressed pandemic

412
3
Lyft to report second-quarter earnings from pandemic-depressed pandemic

The ride-hailing giant will report second quarter results after the market close on Tuesday with Lyft poised to get a boost from improving mobility trends as vaccinations picked up in spring.

Here are the primary results that Bloomberg is expected to post, based on consensus data compiled by Lyft:

Lyft's results for the three months ending in June are expected to lap last year's severely pandemic-depressed metrics, which encompassed the height of stay-in place orders across the U.S. A result, revenue is expected to double compared to the same period over the same period last year. However, Lyft's sales would still be compared with the comparable quarter in 2019 by more than 19%.

As ride-hailing and other travel businesses came under pressure last year, Lyft significantly reduced costs, helping put the company on a stronger path toward profitability now that demand is returning, many analysts have said.

In a note, we expect demand to continue to rebound and as it does, we expect the groundwork Lyft put in place during the depths of the pandemic to better position the company for stronger profitability going forward, Wedbush analysts Dan Ives and Ygal Arounian wrote in a note.

And with demand raised and lower-priced pooling options cancelled in the pandemic, Lyft's revenue per active rider is expected to increase with consensus analysts expecting this to come in at $45.31 for the second quarter compared to $39.06 in the same three months last year. That would come even as active riders grow further, by 14% sequentially to 15.37 million.

Lyft targeted EBITDA profitability in the first quarter of 2021, which would mark adjusted profits for the company since it went public in early 2019. After selling its Autonomous Vehicle Development Unit to a Toyota subsidiary earlier this year, Lyft Chief Financial Officer Brian Roberts said in May that the company would reach adjusted EBITDA profitability even if ride-share volumes this year come in 33% below pre-pandemic levels from late 2019.

As a pure-play ride-hailing company, Lyft has so far been a bigger beneficiary of reopening themes and rotation to cyclical investments this year compared to large competitor Uber. However, this business model has also left Lyft vulnerable to the recovery roadblocks that have recently emerged, including concerns that the spread of the Delta variant could once again curb consumer going out trends. Both Uber and Lyft have been exposed to labor shortages across the U.S. economy, with driver incentives potentially cutting into margins at both enterprises.

We believe ride-sharing trends will continue to improve as both driver supply and consumer demand improves, Rohit Kulkarni wrote in a note on Monday.

Tactically speaking, Uber's 2 Q earnings and 3 Q outlook could present investors with a clear story with progress towards profitability whereas Lyft's recent acquisitions, potential dilution, and unclear global pandemic recovery can add to noise around earnings, he added. Near-term debates include take rate trends, impact of Delta variant on 3 Q outlook, and driver supply constraints.

Shares of Lyft have risen 99% for the year-to-date up to Friday's close, outperforming both the large-cap Russell 2000 and Uber, which have risen 36% and 44%, respectively.