Can Lyft Catch a Ride on Uber's Q4 Results?

Lyft Inc. (NASDAQ: LYFT) is scheduled to release its most recent quarterly results after the markets close on Tuesday. For the most part, analysts seem optimistic about ride-sharing in general going into this report, especially after rival ride-sharing company Uber Technologies Inc. (NYSE: UBER) reported stellar results last week.

For the fourth quarter, analysts expect to see a net loss of $1.39 in earnings per share (EPS) and $984.17 million in revenue.

One thing that differentiates Lyft from Uber is that many consider it a pure-play ride-sharing company. Uber offers a food delivery service, Uber Eats, but this has not been profitable, even with a 21% market share in the food delivery industry.

Beginning January 1, a new California law (AB 5) required ride-hailing firms like Lyft and Uber to treat drivers as employees, not independent contractors. The law applies to delivery firms like Postmates, Instacart and DoorDash as well. Not having to pay a minimum wage or overtime, or unemployment insurance or paid sick leave, was a huge benefit for these firms. Drivers also paid their own expenses, including maintenance and fuel.

However, analysts remain upbeat on Lyft’s stock. Wedbush analyst Dan Ives told Barron’s that Lyft faces a headwind of $8 to $10 a share if California’s AB 5 is not revised in favor of the ride-hailers. Even so, the stock remains rated Buy or Strong Buy by 24 of 36 analysts.

Here’s what a few other analysts had to say about Lyft ahead of the report:

  • JMP Securities has a Buy rating with an $88 price target.
  • Northcoast Research rates it at Buy with a $60 price target.
  • RBC’s Buy rating comes with an $82 target price.
  • SunTrust Banks has a Buy rating and a $75 price target.
  • UBS has a Buy rating with a $64 price target.

Excluding Tuesday’s move, Lyft stock had outperformed the broad markets with a gain of 24% in the past quarter. However, in the past six months, the share price was down 9%.

Shares of Lyft traded at $53.47 on Tuesday, in a 52-week range of $37.07 to $88.60. The consensus price target is $65.63.

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