A sign marks a meeting point for Lyft and Uber users at San Diego State University in San Diego, California, May 13, 2020.
Mike Blake | Reuters
Shares of Lyft were up a whopping 11% on Wednesday as investors rallied around the company after it said the rides’ recovery saw earlier than expected.
Lyft’s recovery also fueled optimism for Uber stocks, which rose as much as 5.8% on Tuesday on an otherwise weak day for tech stocks. It comes despite CEO Dara Khosrowshahi’s cautious remarks at the Morgan Stanley Tech conference on Monday, saying he expects his mobility business to see signs of recovery in the US and Europe, although it is “too early to say.”
Lyft now expects to manage its first-quarter adjusted EBITDA loss to $ 135 million, from the $ 145 million to $ 150 million it previously forecast, according to a filing with the SEC on Tuesday. The company also said the last week of February was the best week in terms of volume since the pandemic lockdowns began in March 2020, and expects the recovery to continue this month.
The company’s burgeoning recovery comes as more states begin to lift Covid-19 restrictions and continue to roll out vaccines across the country.
“We believe LYFT is poised to show a turnaround towards positive year-over-year growth from the week of March 21, which we believe will accelerate in the summer months, barring setbacks in vaccine rollouts. positive, especially given the still uncertain pandemic landscape and weather issues in certain regions, ”CFRA analysts said Wednesday.
Truist analysts said Tuesday that the company’s update on business trends gives the company “incremental confidence that business trends must continue to improve as local governments ease restrictions on social activities and people gradually return to work with C-19.”
“We believe that further easing of restrictions, particularly in Texas, which has been fully reopened, could accelerate improving Y / Y trends during the spring,” she added.
Uber and Lyft have still remained optimistic that they will become profitable by the end of this year based on adjusted EBITDA.
“At this point, LYFT sees encouraging demand signals and has been able to meet this demand while improving profitability while showing solid execution,” Needham analysts wrote in a note to clients on Wednesday.
–CNBC’s Michael Bloom contributed reporting.
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