The company’s outlook for the fourth quarter of 2020, discussed on the November 10 earnings call, implied an adjusted EBITDA loss of roughly $200 million at the midpoint and $190 million at the high end, based on sequential revenue growth of 11% to 15% relative to the third quarter.
In November, it said rideshare rides were down about 50% from last year, primarily due to rising COVID-19 case counts and the related impact on demand. Based on these recent trends and the reintroduction of restrictive measures designed to curtail the spread of COVID-19 in select cities, Lyft now expects sequential revenue growth will be at the lower end of the 11% to 15% range in the fourth quarter of 2020.
Lyft also now expects it can manage its adjusted EBITDA loss in the fourth quarter of 2020 to be better than $185 million. The firm attributes the improvement in its adjusted earnings before interest, taxes, depreciation and amortization outlook for the fourth quarter to contribution margin, which is expected to be at the top end of the previously provided range. Lyft also now anticipates further contribution margin expansion in 2021 on a sequential basis, versus the fourth quarter of 2020, even before a full recovery.
Lyft’s revised outlook for the fourth quarter of 2020 assumes the operating environment does not materially deteriorate.
Looking ahead, the firm plans to release financial results for the fourth quarter in February 2021. So far, consensus estimates are calling for a net loss of $0.73 per share and $569.26 million in revenue for this quarter.
Lyft stock traded up about 4% at $41.18 Wednesday morning, in a 52-week range of $14.56 to $54.50. The consensus price target is $43.44.