A plaque marks a meeting place for Lyft and Uber users at San Diego State University in San Diego, California, May 13, 2020.
Mike Blake | Reuters
Lyft’s shares rose 11% on Wednesday as investors rallied around the company after it said it was seeing a recovery in travel share earlier than expected.
Lyft’s recovery also brought optimism to Uber’s shares, which rose up to 5.8% on Tuesday, on a weak day for technology stocks. It comes despite CEO Dara Khosrowshahi’s cautious comments on Monday at the Morgan Stanley Tech conference, saying he expects his mobility business to see some signs of recovery in the U.S. and Europe, although it is “too early to say”.
Lyft now expects to manage his first-quarter adjusted EBITDA loss to $ 135 million, from the previously forecasted $ 145 million to $ 150 million, according to a filing on Tuesday with the SEC. The company also said that the last week of February was its best week in terms of volume since the pandemic blockades began in March 2020 and expects the recovery to continue this month.
The company’s growing recovery comes as more states are beginning to lift Covid-19 restrictions and vaccines continue to be implemented across the country.
“We believe that LYFT is positioned to show an inflection towards positive growth year after year starting in the week of March 21, which we believe will accelerate in the summer months, except for any setbacks with vaccine launches. We see the prospects of LYFT’s first quarter travel as a positive aspect, especially given the still uncertain scenario of the pandemic and climate problems in certain regions, “according to CFRA analysts on Wednesday.
Truist analysts said on Tuesday that the company’s update on business trends gives the company “an incremental confidence that business trends should continue to improve as local governments ease restrictions on social activities and people. return to work with the C-19 gradually decreasing “.
“We believe that further easing of restrictions, particularly in Texas, which has been completely reopened, could accelerate the improvement in Y / Y trends during the spring,” they added.
Uber and Lyft are still optimistic that they will become profitable by the end of this year based on adjusted EBITDA.
“At this point, LYFT is seeing encouraging signs of demand and has been able to manage that demand while driving towards greater profitability while showing solid execution,” wrote Needham analysts in a note to customers on Wednesday.
– Michael Bloom of CNBC contributed reports.
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