Mackenzie Tatananni

Lyft stock sank in premarket trading Wednesday after the ride-hailing app reported lower-than-expected gross bookings for the fourth quarter, and issued mixed guidance.

Shares plunged 14% to $12.31 in early trading. The sharp decline came after Lyft reported revenue of $1.55 billion for the December quarter, narrowly missing analysts' forecasts for $1.56 billion, according to FactSet.

Gross bookings, a key performance indicator representing the total dollar value of transactions invoiced to riders, rose 15% to $4.28 billion in the quarter, below forecasts for $4.32 billion.

The company said its board had approved the repurchase of up to $500 million of stock.

Disappointing bookings guidance is weighing on shares Wednesday morning. Lyft sees first-quarter earnings before interest, taxes, depreciation, and amortization of $90 million to $95 million, with a $92.5 million midpoint above the $92.1 million estimate, but gross bookings of about $4.05 billion to $4.2 billion is short of the estimate for $4.24 billion.

Truist Securities analysts led by Youssef Squali lowered their price target on Lyft shares to $17 from $20.

"Revenue and gross bookings came in slightly below consensus expectations and slightly below the company's guidance," Squali wrote, pointing to "healthy underlying demand" offset by pricing softness that arose in late December.

While Lyft "continues to make progress," Truist maintains a Hold rating "awaiting more-consistent performance."

A possible catalyst could be Lyft's move into the autonomous-vehicle market. Squali pointed to partnerships with privately held, Ann Arbor, Mich.-based AV operator May Mobility, dashcam company Nexar Group, and Mobileye Global, all of which should help Lyft establish a foothold in the space.

On Monday, Lyft announced that robo-taxis powered by Mobileye could arrive in the app as soon as 2026. Rollout will begin in Dallas "with plans to scale thousands of vehicles to additional cities," the company told Barron's.

Lyft's larger rival, Uber Technologies, said in September that it was expanding a partnership with Waymo to bring robo-taxis to Austin and Atlanta in early 2025. Uber shares were down 1.4% in premarket trading.

"We see AVs as a key threat, and as a biggest opportunity for both Lyft and Uber," Squali wrote.

"While we think Uber is better-positioned as a partner for AVs given its larger scale and global presence, we are encouraged by Lyft's announcement of three strategic partnerships, and its intentions to add more AV-related partnerships in the future."

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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February 12, 2025 09:36 ET (14:36 GMT)

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