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Lyft (LYFT) shares have downshifted into reverse.
Shares of the number two ride hailer initially popped 14% after-hours on Tuesday immediately following earnings. Investors were apparently roped into some initial headline rosiness.
Lyft’s revenue figures came in line estimates, despite immense pressure from larger rival Uber. That was seen as a key win.
The company’s third quarter sales guidance caught investors’ attention as well, coming in a couple million dollars ahead of estimates.
But that’s where the goodness stops, and now shares are plunging 6%. A quick and dirty comparison to Uber’s second quarter last week probably explains the share reversal.
Though Uber missed on the top line, the company offered a more positive outlook and notched free cash flow. Uber’s net income came in at $394 million, a stark win compared to the net loss of $2.6 billion at the same time last year.
Lyft’s core net loss clocked in at $114 million.
Meantime, Uber saw the number of trips rise 22% in the quarter. Lyft’s active riders only improved 8.2% from a year ago, hinting at further market share erosion to Uber.
The earnings rundown
Here are the key numbers that Lyft reported compared to Wall Street’s estimates, as compiled by Bloomberg:
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Revenue: $1.02 billion actual versus $1.02 billion expected
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Adjusted earnings per share: $0.16 actual versus -$0.01 expected
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Active riders: 21.5 million actual versus 21.1 million expected
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Q3 revenue outlook: $1.13-1.15 billion actual versus $1.08 billion expected
“The rideshare market is growing,” Lyft CFO Erin Brewer said in a statement. “We had a solid second quarter and we have strong ride momentum going into Q3 and the back half of the year.”
What we’re watching: pricing
Keep an eye out for what Lyft management says about pricing on the earnings call this evening.
It’s an area where they’ve sought to be increasingly competitive, and Uber has publicly taken notice, with Uber CEO Dara Khosrowshahi dubbing Lyft a “tough competitor.”
“They’ve taken some tough actions, and they are competitive in pricing now,” Khosrowshahi said in the company’s earnings call. “Generally, our pricing is quite comparable to Lyft and that has resulted in, I’d say, a constructive competitive marketplace.”
What analysts were saying pre-earnings:
“The focus is on lower pricing right now to better compete with Uber. We think this should stabilize the market share position for Lyft, at least for the time being.” – CFRA’s Angelo Zino.
“We view evidence of ongoing recovery in driver supply as likely helping boost the Company’s take rate and EBITDA margin for Q2. The key question for LYFT remains on the company’s ability to ramp profitability – we expect management to provide additional color around [long-term] profitability goals in the coming quarters.” – Mark Mahaney, Evercore ISI
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.
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