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Lyft co-founder on stock crash: 'We do not like that'

·Anchor, Editor-at-Large
·2 min read
In this article:
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Lyft co-founder John Zimmer told Yahoo Finance Live he and his team are actively looking for ways to regain Wall Street's confidence after a disappointing outlook sent shares falling 33% on Wednesday.

"I'll be crisp, and I will be clear — we do not like that," Zimmer said of the market's harsh reaction (video above). "That might sound like a sound bite, but it's the reality. We question all the decisions we make when we see something like that. We talk to our investors. We take it extremely seriously."

Lyft's guidance was brutal: The company sees adjusted operating profits of $10-$20 million for the second quarter while the Street was modeling about $83 million in profits. Lyft blamed increased investments in driver incentives, technology, and marketing for the soft outlook.

The outlook overshadowed a solid quarter by Lyft. Active riders rose 31.9% from a year ago, and the company ended the quarter with $2.2 billion in cash.

Here is how Lyft performed compared to Wall Street estimates:

  • Net Sales: $875.6 million vs. $848.9 million

  • Adjusted EPS: $0.07 vs. a loss of 7 cents

The Lyft <LYFT.O> Driver Hub is seen in Los Angeles, California, U.S., March 20, 2019.  REUTERS/Lucy Nicholson
The Lyft Driver Hub is seen in Los Angeles, California, U.S., March 20, 2019. REUTERS/Lucy Nicholson

Wall Street took a much more cautious view on the stock following the earnings day commentary.

"Lyft is a pure-play on the recovery in U.S. ride-hailing, but we prefer Uber for its leverage to global recovery theme, platform advantage, and covid hedge from delivery business," said Jefferies analyst Brent Thill, who cut his price target on Lyft to $35 from $45 and maintained a hold rating.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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