Shares of Lyft LYFT-Q fell more than 30 per cent before the bell on Friday after forecasting first-quarter profit below estimates, amplifying worries that it was falling behind Uber UBER-N as the ride-hailing firms look to rebound from pandemic lows.
Both the companies have been locked in a battle for market share coming off the pandemic, when they had to tackle challenges such as driver shortages and rising costs.
“The more protracted Lyft’s post-COVID marketplace rebalancing has become, the more concerned we have become with the company’s ability to regain its prior category position,” D.A. Davidson analyst Tom White said.
Factors pressuring the company’s profits include lower prices, seasonality and changes in insurance renewal timing, Lyft Chief Financial Officer Elaine Paul said on Thursday.
Bigger rival Uber on Wednesday forecast first-quarter operating profit well above analysts’ estimates.
Analysts believe Uber, which has a market capitalization nearly 12 times that of Lyft, possesses a significant advantage given its scale.
“These results reinforce our thesis that Lyft is at a structural competitive disadvantage versus Uber in terms of market share, driver supply and expenses,” RBC Capital Markets analysts said on Friday.