Lyft’s Network Effect Remains on Display, but Guidance Was a Big Disappointment; Lowered FVE

Shares of Lyft traded down 30% in after-hours after the firm’s disappointing first-quarter outlook overshadowed strong fourth-quarter results. Lyft’s guidance supported our assumptions that the firm’s progress to GAAP profitability will be delayed, the firm is less likely to hit $1 billion in adjusted EBITDA in 2024 (due to operations and change in non-GAAP reporting), and that it may be losing market share to Uber, as we stated in our previous note. However, we were pleased with the growth in active riders and monetization, which indicates a network effect is present, although not as strong as Uber’s.