(Reuters) - Lyft Inc shares sank 20% to adjacent grounds lows connected Tuesday aft a miss connected progressive rider maturation fanned fears that bigger rival Uber Technologies Inc was eating into its marketplace share.
More than a twelve analysts slashed their terms targets connected Lyft by arsenic overmuch arsenic $23 aft third-quarter results. In stark contrast, investors had past week cheered Uber’s results and bumper holiday-quarter forecast.
“We judge Uber has done a overmuch amended occupation astatine rebuilding operator supply, apt leaving Lyft with a structurally smaller stock of the marketplace than it had pre-pandemic,” Atlantic Equities expert James Cordwell said.
Active riders connected Lyft’s level grew conscionable 7.2% to 20.3 cardinal successful the July-September period, the slowest gait this twelvemonth and a cardinal beneath marketplace expectations. Uber posted a 22% leap successful progressive consumers successful the rideshare conception during the aforesaid period.
“While we deliberation Lyft volition stay the second-largest ride-hailing level successful the U.S., we are present assuming Uber volition somewhat summation its marketplace stock implicit Lyft during the adjacent fewer years,” Morningstar expert Ali Mogharabi said.
Lyft’s banal was trading astatine $11.30, hovering adjacent its grounds debased of $10.83. The shares person mislaid much than 70% of their worth this year, compared with Uber’s 35% decline.
GRAPHIC: Lyft shares underperform rival Uber's
Investors person besides focused connected Uber’s transportation concern that had besides helped it thrust retired a slump successful request during lockdowns amended than pure-play ride-hailing supplier Lyft.
A cost-cutting thrust should assistance easiness immoderate of the unit and assistance boost Lyft’s profitability, according to Daiwa Capital Markets expert Jairam Nathan.
The institution is betting connected stronger request and higher work fees to offset an expected summation successful insurance-related costs for the existent quarter.
Still, immoderate analysts preferred Uber fixed its scale, concern exemplary and planetary presence.
“While we presumption Lyft’s competitory presumption favorably, the institution whitethorn request to show a 4th oregon 2 of maturation astatine oregon supra manufacture levels to bolster capitalist confidence,” Canaccord Genuity expert Michael Graham said.
Reporting by Nivedita Balu successful Bengaluru; Editing by Devika Syamnath and Sriraj Kalluvila