Summary
  • Autonomous Vehicle Technology.
  • Why Lyft is ultimately a risky investment.
  • Lyft is clearly betting heavily on autonomous vehicle technology.

 

After months of anticipation, Lyft (LYFT) has finally publicly released its S-1 report, revealing key financial details that experts could only guess at before. While we do not know yet how much Lyft plans to raise nor its planned valuation, $20 billion has been commonly tossed about as an expected market cap for the ride-sharing company. Mashable reported in late February that we can expect Lyft to go public around March 18, but we could also see the company delay until April.

The S-1 report is an important document to determine whether this will be a worthwhile investment. Here are some of the key numbers and statements, as well as an explanation for why Lyft is ultimately a risky investment which I would tell most people to avoid.

$911 million

That above number is the single most compelling statistic against Lyft. It represents the company’s net loss in 2018, up from $688 million in 2017 and $682 million in 2016. Lyft is not just unprofitable. It is losing nearly a billion dollars per year, and its losses have increased over the past three years.

That Lyft is massively unprofitable is not news. Investors have known for years that the company is attempting to grow its way into profitability, and it is good to see that revenue rose from $343 million in 2016 to $2.15 billion in 2018. But the magnitude of Lyft’s losses is staggering, especially when combined with other problematic numbers.

For example, the company also reported “negative cash flows from operations of $280.7 million for the year ended December 31, 2018,” as well as an accumulated deficit of $2.9 billion. Given its cash reserves on hand, as well as the fact that Lyft will not be profitable anytime soon, it appears likely that the company will need to do another offering at some point in the next few years just to stay profitable.

Lyft can point to an increasing number of riders and revenue, but that is completely overshadowed by the fact that it appears that the company will not be making a profit for years. Fortune even points out that a section of this report related to tax accounting indicates that Lyft may not expect to make money for another 11 years.

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