Lyft stock traded lower Thursday despite an earnings report late Wednesday that topped expectations. Newly disclosed data by Lyft on total bookings brought unfavorable comparisons to its larger ride-hailing rival Uber.
Lyft reported adjusted third-quarter earnings of 24 cents per share on $1.16 billion in sales. On average, analysts polled by FactSet expected the ride-hailing company to earn an adjusted 15 cents a share with $1.14 billion in sales.
Total bookings — disclosed by Lyft for the first time in this report — were up 15% year over to $3.55 billion. By comparison, Uber earnings released a day earlier showed gross ride-hail bookings climbing 31% year over year to $17.9 billion.
"The company provided long-awaited bookings and rides disclosure, which investors have wanted since the initial public offering," wrote RBC analyst Brad Erickson in a client note Wednesday. "Less positively, the incremental disclosure may not necessarily work in LYFT's favor, where bookings could shine a greater light on structural challenges vs. UBER."
On the stock market today, Lyft fell 6% to 10.08.
Lyft Stock: Serving More Riders
Overall, Lyft revenue in the third quarter climbed 10% year over year. It also narrowed its net loss to $12 million, compared to $422 million in the same quarter last year.
"We had another quarter of solid execution — we saw strong driver and rider growth and our marketplace health continued to improve," Lyft Chief Financial Officer Erin Brewer said in the Q3 news release. "Our Q4 outlook calls for continued progress, and the updates we are making to our key business metrics today better align our reporting with our strategic priorities."
For the fourth quarter, Lyft expects revenue to grow in the mid-single-digits quarter over quarter. Analysts expected $1.2 billion in sales, according to FactSet, representing roughly 3.5% sequential growth.
Further, Lyft projects adjusted earnings between $50 million and $60 million for the fourth quarter. Analysts were expecting $50 million, according to FactSet.
In the third quarter, active riders using Lyft climbed 10% year over year to 22.4 million. The active riders total fell slightly short of expectations of 22.6 million, according to FactSet.
The company routed 187 million rides, up 20%. That number includes ride-share and bike and scooter rentals. This is the first quarter Lyft has broken out total rides as a separate category.
Lyft vs. Uber
But the negative stock market reaction highlights the shadow cast over Lyft by its much larger rival. While Uber has nearly doubled its share value this year, Lyft stock is down 8.5%.
Uber operates on an international scale while Lyft is focused in North America. Further, Uber operates a food-delivery and freight division whereas Lyft is focused in ride-hailing with smaller operations in scooter and bike rentals.
"We believe LYFT's Q3 bookings growth of 15% year over year (and) 3% quarter over quarter potentially highlights share loss, where UBER globally grew 31% year over year and 7% quarter over quarter, with the U.S. likely being somewhat below," wrote RBC's Erickson.
RBC maintained a neutral sector perform rating with a price target of 12.
Uber captured an estimated 74% of U.S. ride-share sales in September to Lyft's 26%, according to credit card spending analyzed by Bloomberg Second Measure.
Lyft Stock: Plans For Catching Uber
Under new Chief Executive David Risher, Lyft has cut costs and lowered fares in a bid to catch up to Uber. That was seen in the company's revenue-per-rider metric, which fell 7% sequentially to $47.51 in the June quarter. For the September quarter, the number edged back up to $51.67.
On the company's earnings call, Risher highlighted new products and partnerships. Risher said a commuting service from Lyft has developed relationships with Amazon, Netflix and Microsoft's LinkedIn as more workers return to the office.
"Differentiated products, they give people a reason to choose Lyft over Uber, but they also give us a way just to accelerate our growth," Risher said.
