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Lyft (LYFT) reported fourth quarter revenue of $1.55 billion, slightly below analyst estimates of $1.56 billion. The company also provided softer-than-expected bookings guidance, which weighed on its stock.
Roth MKM managing director Rohit Kulkarni joins Market Domination Overtime to break down the earnings results.
Kulkarni notes that the disappointment stems from missed bookings during the quarter, with the company also guiding for a soft booking outlook in the first quarter. He compares Lyft's performance to Uber (UBER), pointing out that Uber is operating at a "larger scale" and "growing faster."
"There's almost a tale of two cities," he explains to Yahoo Finance, adding that the growth gap between Uber and Lyft is "worrisome" for Lyft's future prospects. He also highlights the company's lack of pricing power as a key concern.
"The product portfolio of Lyft today versus what it was maybe 9, perhaps 12 months ago is significantly better with regards to innovating in the mobility side," he tells Yahoo Finance. However, he adds, "At the end of the day, this is a marketplace with a demand–supply balance that Lyft and Uber have to strike. Right now, perhaps there is oversupply at Lyft," noting that this has an "indirect impact on price."
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While acknowledging that Lyft has been improving operations, Kulkarni emphasizes that he is looking for more "consistent execution" from the company.
To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here.
This post was written by Angel Smith