'Line Of Sight To Positive EBITDA': Analysts React To Lyft Earnings

LYFT Inc LYFT shares traded lower by 3.8% on Wednesday after the company reported 7% quarter-over-quarter revenue growth.

For the first quarter, Lyft reported an adjusted EPS loss of 35 cents on $609 million in revenue. Both numbers beat consensus analyst estimates of a 53-cent EPS loss and $558.7 million in revenue. Revenue was down 36% from a year ago.

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Lyft reported 13.49 million active riders in the quarter, exceeding analyst estimates of 12.8 million riders. Revenue per rider of $45.13 also beats Wall Street expectations of $44.50.

Looking ahead, Lyft guided for second-quarter revenue of between $680 million and $700 million The company also said it still plans to reach adjusted EBITDA profitability by the third quarter.

D.A. Davidson analyst Tom White said Lyft has a “line of sight to positive EBITDA” in the second half of 2021.

“Increased investment in Driver supply ... is expected to help satisfy growing Rider demand and thus yield a higher volume of expected rides in 2H'21,” White wrote.

Raymond James analyst Aaron Kessler said Lyft’s operating leverage is particularly impressive.

“We remain positive on the longer-term outlook for Lyft fundamentals as rideshare adoption remains early, Lyft was demonstrating strong growth and margin leverage pre-COVID, numerous long-term growth drivers (e.g., market adoption, new products, continued innovation), and our outlook for 20%+ long-term EBITDA margins,” Kessler wrote.

KeyBanc analyst Edward Yruma said Lyft remains one of his top economic reopening stock picks.

“We believe we are still in the early stages of an upward earnings revision cycle, which affirms our bullish view,” Yruma wrote.

Recovery Priced In: Morgan Stanley analyst Brian Nowak said the sequential quarterly growth in rides is an encouraging sign.

“LYFT's results speak to the faster rideshare demand recovery and TAM expansion (including new riders), near-term supply constraints, and a path toward profitability,” Nowak wrote.

Needham analyst Bernie McTernan said supply constraints boosted pricing power in the first quarter, but a strong recovery is already priced into the stock at current levels.

“We think the secular recovery tailwinds are well understood and see more compelling risk-reward elsewhere in our coverage,” McTernan wrote

Ratings And Price Targets:

• D.A. Davidson has a Buy rating and a $72 target.
• Morgan Stanley has an Equal-Weight rating and a $70 target.
• Raymond James has a Market Perform rating.
• KeyBanc has an Overweight rating and a $72 target.
• Needham has a Hold rating.

(photo: Lyft)