Lyft Earnings: Weakening Network Effects and Light Guidance Result in Punishment; Fair Value Down 6%

Lyft reported earnings that missed management guidance on gross bookings and rides growth while also missing FactSet consensus expectations for top-line growth. The company also provided weak guidance for the first quarter. On a positive note, there was a slight improvement in gross and incremental margins—though these are notoriously volatile measurements—and Lyft announced a $500 million share repurchase program. However, the number of active riders and engagement (rides/rider) showed some deterioration in network effects, which supports our no-moat rating.