[By Brian Sozzi] Lyft (LYFT) executives have done a good job since the IPO last year distinguishing their business model from fellow money-losing ride-share platform Uber (UBER). The stock price of Lyft has generally been viewed more favorably relative to Uber as a result of that impressive sales job. Unfortunately for Lyft shareholders though, execs took their eyes off the ball when it came to assessing market sentiment this earnings season. And investors who were starting to finally believe in Lyft are now left holding the bag, with the stock crashing 10% on Wednesday post earnings. First, Lyft execs must have forgotten what rival Uber said just a few days earlier on it moving up its profitability target to the fourth quarter of 2020. Lyft — which was the first public ride-hailing platform to give Wall Street guidance to profitability —only reiterated that it sees profits by the fourth quarter of 2021. The market didn’t want to hear that in the wake of Uber’s inspirational (if not aspirational…) message, especially in light of Lyft’s more focused business model. It’s a model that was always supposed to turn a profit before Uber, which is hemorrhaging losses from Uber Eats and other bets. No first-class plane tickets for Lyft executives, CFO says. Lyft’s guidance is possibly conservative given its history of sales and bottom line beats (four in a row for this quarter). But on this particular earnings day it doesn’t matter, the Street reads it as Uber’s larger size could be getting the better of Lyft (or the company plans some outsized investment or may be hurt by new worker legislation such as the one in California). “Investors were expecting more from Lyft after Uber set a stronger path to profitability last week,” Wedbush analyst Dan Ives — who has an Outperform rating on the stock — says. Besides Lyft guiding to much slower revenue growth in the first quarter compared to the pace in 2019, there are a few other negatives that likely upset investors. For instance, execs failed to explicitly answer an analyst question on the call about the pace of active rider growth. They also gave no definitive insight into current pricing trends for the ride-sharing business. The lack of color on each signaled to investors Lyft’s business may have entered the first quarter with so-so momentum at best. Bottom line: The market wanted more. Lyft didn’t deliver. Despite the fumbles, most on Wall Street are sticking with the stock. Why the hell not — if you loved Lyft 10% higher, why not love it 10% lower after a quarter of pared operating losses year-over-year. “Fundamentals and profit potential remain intact, and valuation 2.6x EV/S (’21) is at discount to UBER 3.1x and comp group median 4.1x,” wrote Jefferies analyst Brent Thill in a note to clients. Lyft declined to make its CFO Brian Roberts available for an interview.


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