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Yesterday ride-hailing company Lyft released its first-ever quarterly earnings report after going public a few months ago and the results were less than good.
Lyft reported a loss of $1.14B on revenues of $776 million last quarter, which while it slightly beat Wall Street expectations of $740 million, the loss greatly outpaced expectations. Lyft said that adjusted for the one-time IPO costs, its adjusted losses were $211 million versus $228 million a year ago.
Lyft stock plummets 11%
Investors weren't thrilled with a loss of $48 dollars per share, and today Lyft (NASDAQ:LYFT) tumbled to less than $53 dollars per share, an eleven percent drop compared to Tuesday, and now stock in the company is trading at an all-time low since shares were listed in late March.
Of course, this situation with Lyft and its steadily decreasing value continues to cast a very dark shadow on the year's most valuable (as of right now) IPO coming up in just a few weeks, rival Uber Technologies. Uber had previously been gunning for a valuation as high as $120 billion, however, among other factors, Lyft's valuation didn't hold on the market and now Uber is seeking an IPO that would value the world's largest ride-hailing company at around $80 to $85B.
Still, many analysts who cover Lyft are sticking to their guns with mostly positive ratings and a median price target of $77 which represents a massive 44 percent upside for the company.
For its part, the company expects to grow by more than half this year, which is solid unless you compare it to 2018's growth of over 100 percent. The real question here is - Can the world's second-place ride-hailing company shore up its losses while continuing to drive growth? Is its current valuation somewhat reasonable? That's hard to answer yet but let's apply Lyft's valuation to Uber.
If Lyft can achieve its 55 percent growth in 2019 that its aiming for, at current prices Lyft would be trading around 5 times its 2019 revenue. If we take a look at Uber's revenue estimates from public sources, Uber would be worth around $68 billion. It may not be too hard to see Uber fall off a bit after their upcoming IPO.