LYFT Inc (NASDAQ:LYFT) arrived at its Q1 earnings report "moment" earlier this month with muted expectations to say the least. The COVID-19 pandemic has decimated the ride-sharing industry, understandably. Being bottled up in a chamber with a stranger who may have had exposure to a range of unknown other individuals in close quarters in a small enclosed space is not something that sells during a pandemic crisis. That goes for both riders and drivers. So, the market was understandably expecting the worst-case scenario here.
Once again, INTC experienced robust growth in that very element (the Data Center Group – DCG) as revenue soared by 43%, bolstered by 53% growth in cloud service provider revenue. The primary catalysts fueling growth in the DCG is the powerful trend among enterprises to move data to the cloud and the digitization of businesses. Over the past several years, INTC has transitioned from a PC-centric company to a data-centric company focused on cloud computing, networking infrastructure, and AI.
However, contrary to expectations, the country's second largest ride-sharing company blew out 1Q20 forecasts, delivering surprisingly impressive results. EBITDA is a big data point for LYFT – it came in at ($85), which is up y/y by over 60%. Analysts were looking for negative-$201 million. LYFT also cut total costs by 29%, led by R&D, which plummeted by well over 55%. That’s all great news – but nothing shocking. The real shocker that drove the stock up as much as 25% the next day was the monster top-line beat: despite stay-at-home orders and pandemic fears, LYFT put up sales growth of 23% on $956 million in revenues, smashing consensus expectations by over 15%.
That said, at this point, the stock is already back down around the $28. What gives? This is a tough long-term narrative to love because the company may never make a single penny in earnings. Ever. Like UBER, this is a play on the “inevitable autonomous vehicle” thesis. But autonomous vehicles stand a good chance of getting traction as public transportation systems, which would invalidate the entire thesis for shareholders. That said, at this point, the volume game is playing out at least a bit better than expected for LYFT amid continued pandemic challenges.
LYFT Inc (NASDAQ:LYFT) promulgates itself as a company that operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada.
The company offers riders, personalized and on-demand access to various transportation options. It provides Ridesharing Marketplace, which enable drivers to provide their transportation services to riders.
The company also offers a network of shared bikes and scooters in various cities to address the needs of riders for shorter routes; Express Drive program, a flexible car rentals program that connects drivers who need access to a car with third-party rental car companies; and concierge for organizations to manage the transportation needs of their customers and employees.
In addition, it integrates third-party public transit data into the Lyft app to offer riders various transportation options; offers various enterprise programs, including monthly ride credits for daily commutes, supplementing public transit by providing rides for the first and last leg of commute trips, late-night rides home, and shuttle replacement rides; and provides transportation solutions that can be customized for events, such as recruiting events, conferences, celebrations, meetings, and company retreats.
The stock has suffered a bit of late, with shares of LYFT taking a hit in recent action, down about -14% over the past week. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -3%.
Our LYFT Earnings Summary:
-
Lyft reports Q1, beats on revs, does not provide guidance
-
Reports Q1 (Mar) GAAP loss of $1.31 per share. Revenues rose 23.2% year/year to $955.7 mln vs the $830.18 mln S&P Capital IQ Consensus.
-
Adjusted net loss for 1Q20 was $97.4 mln versus an adjusted net loss of $211.5 mln in the first quarter of 2019. Using the $97.4 mln adjusted loss and the weighted-average number of shares outstanding (diluted) of 304.5 mln for Q1, we arrive at an adjusted net loss per share of ($0.32). The S&P Capital IQ consensus is for a loss of ($0.63).
-
Co maintained essential factory operations with greater than 90% on-time delivery.
-
Average riders increased 3% yr/yr to 20.5 mln.
-
Company does not provide guidance.
Our LYFT Research and Conference Call Notes:
-
Piper's Alexander Potter commented, "We are downgrading from Overweight to Neutral, following stronger-than-expected Q1 results. Our thinking is straightforward: due to COVID-19, we have less faith in the attractiveness of the ride-hailing theme over the next 1+ years. We are encouraged by management's aggressive actions re: cost containment and cash preservation, and these actions should help LYFT withstand an extended period of uncertainty. But in the postCOVID era, we think health concerns may discourage riders from quickly returning to the LYFT platform. It now appears that higher demand in March was a head fake, likely driven by pre-shutdown Costco runs or last-minute commutes. Ridership has imploded since then, and like LYFT, we don't know how/when the recovery will unfold."
-
CEO Logan Green commented that LYFT is no longer offering ride discounts, which helps explain why revenue per rider increased by 19% to $45.06.
-
He also stated that competitors (i.e. UBER) also stopped offering rider discounts in recent months.
-
LYFT has reduced costly driver incentives as driver demand has escalated due to sharply rising unemployment.
-
Since mid-April, LYFT has experienced week-on-week growth in ride requests.
-
In the first week of May, rides increased by 21% in the U.S. compared to the low point on April 12.
