Lyft stock dropped as outlook for bookings disappointed

Lyft (NASDAQ:LYFT) stock closed Wednesday’s trading down 17%, to $9.08, after concern over ride booking numbers overshadowed its “first-ever profit”.

The gig work and ride-sharing firm banked $5 million of profit in its second quarter after revenue improved just over 40% year over year to $1.44 billion.

Gross bookings totalled $4.02 billion short of a Wall Street forecast of $4.07 billion.

The number of ‘active riders’ using the Lyft app increased by 10% to 23.7 million whilst the total number of rides was up 15% reaching 205 million.

Looking ahead, Lyft gave guidance for third-quarter gross bookings that underwhelmed.

Lyft said it expected to see between $4 billion and $4.1 billion of gross bookings in its third quarter, which was lower than the $4.15 billion mid-point consensus among analysts.

Scott Devitt, analyst at Wedbush, in a note said he thought expectations were already low heading into results, highlighting a 30% decline in the shares since June’s ‘investor day’.

“Following the company's weak 3Q guide and commentary regarding the full year, we think the setup is more challenging for Lyft to execute across ongoing initiatives to achieve its longer-term targets,” the analyst said. Wedbush has a ‘neutral’ rating on the app operator.

Erin Brewer, Lyft chief financial officer, commented that: “[the] platform is growing in a very healthy way as evidenced by the strength of our financial results.”

Meanwhile, chief executive David Risher added: “In Q2 we delivered, and drivers and riders are choosing Lyft in record numbers.”