US Ride-Sharing Company Lyft's Stock Rollercoaster Despite Surprising Earnings

Ride-sharing company Lyft, a competitor of Uber, is experiencing a sharp decline of over 6% in after-hours trading despite posting unexpectedly strong earnings.

On the 8th (local time), Lyft announced in its earnings report that its second-quarter revenue increased by 3% year-over-year to $1.02 billion (approximately 1.34 trillion KRW).

The net loss narrowed to $114.3 million compared to $377.2 million in the same period last year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at $41 million, surpassing market expectations of $28 million.

Active users also met expectations at 21.5 million, compared to the forecast of 21.1 million.

The outlook for the third quarter is also positive. The company projected third-quarter revenue between $1.13 billion and $1.15 billion, exceeding market expectations of $1.09 billion. EBITDA is expected to be between $75 million and $85 million, also surpassing the market estimate of $50 million.

[Image source=Reuters Yonhap News]

Lyft’s stock, listed on the New York Stock Exchange, initially surged nearly 20% in after-hours trading following the strong earnings report but then quickly reversed. As of 8:23 AM Korean time, Lyft’s stock is down over 6% in after-hours trading.

The decline is attributed to concerns that Lyft’s price-cutting strategy could negatively impact future profitability. Lyft is expanding its price reduction policy to gain a competitive edge over Uber and increase market share.

Mark Mahani, an analyst at Wall Street investment advisory firm Evercore, pointed out, "Investors’ view on Lyft remains that the company still lacks sufficient ability to improve profitability."

Meanwhile, Uber, which announced its earnings earlier on the 1st, also posted strong results. Its second-quarter revenue rose 14% year-over-year to $9.23 billion, and operating profit reached $394 million, marking the company’s first quarterly profit since its founding in 2009.

This content was produced with the assistance of AI translation services.