Shares of ridesharing service Lyft Inc. (LYFT) could be subject to a correction after the company announced a drop in traffic numbers in November 2020. This could be an opportunity for long-term investors to join, as Lyft’s consumer activity is expected to rebound after the coronavirus pandemic ends.

Lyft said that in the past month, its number of trips dropped by 50 percent compared to the same time last year. Because of this at the lower end of the forecast range of 11 percent to 15 percent, the company now expects stable revenue growth in the fourth quarter. Thus, COVID-19’s second wave had a significant effect on Lyft customer operation. In the United States, several states have closed shops, resorts, and reduced the movement of visitors and business travelers.

Throughout 2020, Lyft lost a large amount of future sales and laid off about 1,000 employees, reduced wages, and decreased office space. However, Lyft was able to minimize costs and increase margins at the same time. Lyft now expects adjusted negative EBITDA to be better than $185 million, while a $200-$190 million loss was previously expected.

If the COVID-19 crisis is short-lived, Lyft will benefit from a temporary reduction in losses, and the company will be able to easily recover previous traffic volumes later on. At the same time, Lyft’s prospects are also impacted by macroeconomic instability. The labor market and consumer spending, including in the service sector, would be adversely impacted by a prolonged crisis.

Lyft Inc. (LYFT) stock rose by 1.22 percent to $48.11 in Thursday session, while over the past week it has gained 11.62 percent. Since start of the year, stock has added 11.83 percent to its value which is 30.18 percent over the past six months. Company’s current market capitalization is standing at $14.28 billion as of December 10.

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