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Lyft Improves Q2 View on 26% Rise in May Rides, Stock Up

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Lyft’s (LYFT - Free Report) shares rose 4.7% in after-hours trading on Jun 2, following news that the company witnessed a substantial increase in ride volumes in May from April. Based on this, the company has improved its outlook for second-quarter adjusted EBITDA loss.

In the SEC filing on Jun 2, Lyft revealed that rides increased 26% in May from April although the same was down 70% year over year. Since the week ended Apr 12, 2020, rideshare rides rose week over week for 7 successive weeks. On a year-over-year comparison, rideshare rides declined approximately 66% in the week ended May 31, 2020. However, the same was up 5.5% on a week-over-week comparison.

Lately, the company has witnessed a surge in rideshare rides in certain cities where coronavirus-led restrictions have been eased. For instance, “rideshare rides increased 73% in Austin, 41% in Denver, 54% in Las Vegas, 59% in Miami, 64% in Nashville, 42% in New York City, 40% in Phoenix, 49% in Salt Lake City and 40% in Seattle in the month of May 2020 versus the month of April 2020. In addition, bike rides on the Lyft platform increased 118% in May 2020 versus April 2020.”

With relaxations on stay-at-home orders, Lyft saw a larger volume of trips in the last three weekends compared to weekdays. This is a reversal of what the company has been seeing since mid-March when ride trips were more during weekdays compared to weekends under strict coronavirus-induced restrictions. In the week ended May 31, rideshare rides ascended 36% and 53% compared with the weeks ended Apr 26 and Apr 12, respectively.

Based on the uptrend in ride volumes in May from that in April, the company expects adjusted EBITDA loss for the second quarter to not exceed $325 million, given that average daily rideshare ride volumes in June is commensurate with the volume levels in May. This is an approximate 10% improvement from the company’s previous expectation of an adjusted EBITDA loss not exceeding $360 million in the second quarter.

Price Performance

Social distancing norms and stay-at-home orders in the wake of the coronavirus, weighed significantly on Lyft’s ride volumes. Consequently, shares of the company plunged more than 33% since the beginning of February, against the industry’s 4.2% rise.

Price Performance Since February



 

Zacks Rank & Key Picks

Lyft carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the same space are Dropbox, Inc. (DBX - Free Report) , Sohu.com Limited (SOHU - Free Report) and 21Vianet Group, Inc. (VNET - Free Report) . While Dropbox and Sohu.com sport a Zacks Rank #1 (Strong Buy), 21Vianet Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

While Dropbox and Sohu.com have an impressive earnings history having outperformed the Zacks Consensus estimate in each of the preceding four quarters, shares of 21Vianet Group have rallied more than 99% in a year’s time.

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