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Lyft Inc Class A - Stock Quote LYFT

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Morningstar's Lyft Inc Class A Stock Analysis

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Lyft Beats Q1 Expectations; Guidance Disappoints; Network Effect Remains Intact; Shares Undervalued

Ali Mogharabi Senior Equity Analyst

Analyst Note

| Ali Mogharabi |

While Lyft reported better-than-expected first-quarter results, it provided disappointing second-quarter top- and bottom-line guidance. In our view, the market is overreacting as the stock is down 25% in after-hours trading. Our takeaway from the call and Lyft’s outlook was that demand for ridehailing services will strengthen further in the second half of this year and Lyft has decided to spend more to increase supply which is necessary given Lyft’s already higher driver utilization. While such an investment could also be due to higher fuel costs which management denied, we think it also sheds some light on Lyft’s network effect attracting slightly less drivers than the clear U.S. market leading Uber’s. However, the results and the firm’s outlook also indicate that the network effect on both supply and demand sides remain intact.

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Lyft Inc Class A's Company Profile

Business Description

Lyft is the second-largest ride-sharing service provider in the U.S., connecting riders and drivers over the Lyft app. Lyft recently entered the Canadian market in an effort to expand its market outside the U.S. Incorporated in 2013, Lyft offers a variety of rides via private vehicles, including traditional private rides, shared rides, and luxury ones. Besides ride-share, Lyft also has entered the bike- and scooter-share market to bring multimodal transportation options to users.

185 Berry Street, Suite 5000
San Francisco, CA, 94107
T +1 844 250-2773
Sector Technology
Industry Software - Application
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Speculative Growth
Employees 4,634

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