Lyft shares in reverse on softer profit guidance as analysts flag competitive pressures

Core Insights - Lyft shares fell approximately 13% following the release of fourth-quarter results that met revenue expectations but provided a weaker profitability outlook, attributed to slowing ride growth and competitive pressures [2] Financial Performance - For Q4, Lyft reported adjusted earnings of $0.16 per share, exceeding the $0.12 per share expected by analysts [3] - Adjusted revenue for Q4 was $1.76 billion, reflecting a 3% increase and aligning with consensus estimates [3] - Gross bookings for Q4 reached $5.1 billion, marking a 19% year-over-year increase [4] - For the full year 2025, Lyft reported gross bookings of $18.5 billion, up 15% year over year, and revenue of $6.3 billion, up 9% [4] - Net income for the year was $2.8 billion, a significant increase from $22.8 million in 2024 [4] Operational Metrics - Rides grew by 14% in 2025, totaling 945.5 million, with active riders reaching 29.2 million in Q4, an 18% year-over-year increase [5] - The total number of active riders for the full year was 51.3 million [5] - Lyft launched Lyft Teen, targeting riders aged 13 to 17 [5] Guidance and Analyst Commentary - The company forecasted Q1 adjusted EBITDA between $120 million and $140 million, which was below analysts' expectations of approximately $139.8 million [5] - Jefferies analysts described the quarter as "a mixed bag," reiterating a 'Hold' rating due to a deceleration in ride growth and uncertainty around demand trends [6] - Analysts noted that Q4 EBITDA upside was overshadowed by a slowdown in rides growth, which was about 11% year over year, below expectations [7] - Lyft indicated that the slowdown was influenced by competitive promotional activities in December and emphasized prioritizing durable financial performance over volume [7] - Concerns were raised regarding potential market share losses, with organic bookings growth stable at around 12% year over year, suggesting pressure from faster growth at competitors [8] Long-term Outlook - Jefferies emphasized that maintaining steady market share is crucial for Lyft's long-term earnings trajectory, warning that prioritizing near-term profit at the expense of rider growth could jeopardize long-term earnings potential [9] - The firm lowered its price target for Lyft to $15.50 from $20, citing reduced visibility on growth drivers and lower long-term EBITDA expectations [9]