Lyft Inc. painted a positive picture for its future growth on Wednesday, forecasting key third-quarter demand metrics that surpassed Wall Street expectations, even as its second-quarter revenue and ride numbers fell slightly short of estimates. The company’s optimistic outlook comes as it strategically expands its global footprint and ventures further into the burgeoning field of autonomous vehicles.
The ride-hailing platform announced that it anticipates year-over-year growth in rides to be in the “mid-teens” for the third quarter, a figure that outpaces the 13.5% growth forecasted by FactSet. Furthermore, Lyft projects gross bookings to land between $4.65 billion and $4.8 billion, exceeding the anticipated $4.59 billion. This growth reflects, in part, the company’s recent acquisition of the German taxi app Freenow.
Financially, Lyft reported a profitable second quarter on a GAAP basis, earning 10 cents per share, more than double the 4 cents that Wall Street had expected. This financial performance underscores the company’s focus on sustainable growth.
A significant driver of Lyft’s strategy involves key partnerships to broaden its reach and technological capabilities. In a major move into the European market, Lyft has partnered with Baidu Inc. to launch autonomous rides, with initial plans for Germany and the U.K. next year. Stateside, the company is already testing autonomous vehicles in Atlanta through a collaboration with May Mobility. Bolstering its customer loyalty and appeal, Lyft has also established incentive-rich partnerships with prominent brands like Hilton, Chase, and United Airlines.
Despite the positive forecast, Lyft’s results were released on the same day as those of its larger rival, Uber Technologies Inc., leading to immediate comparisons by investors and analysts. Lyft’s shares experienced a nearly 4% dip in after-hours trading. “They say that ‘comparison is the thief of joy’ and that is the theme for Lyft today,” commented Andrew Rocco, a stock strategist at Zacks Investment Research, noting that Uber reported faster growth.
Rocco added that while Lyft’s results were “robust,” investors are likely reacting to its slower growth compared to Uber, which holds a larger share of the ride-share market and is seen as more aggressive in the robotaxi space. Year-to-date, Uber’s stock has surged by nearly 48%, while Lyft’s has seen a more modest increase of around 8.5%. “Lyft is a laggard from an innovation, growth and price-action perspective,” Rocco concluded.
