Shares of Lyft Inc. closed lower than $10 for the first time Tuesday as the ride-hailing company’s shares head for their worst year yet.
stock fell 3.3% to $9.87 on Tuesday as they continue a decline that has cost the ride-hailing company roughly $11.18 billion in market capitalization. Shares have declined nearly 77% so far this year, leaving Lyft with a market cap of roughly $3.56 billion.
As its stock has fallen this year, the company has been slashing costs, with executives emphasizing on each quarterly earnings call with analysts that they are being disciplined and are continuing to target profitability.
“Time and time again, we’ve proven our ability to make hard decisions and overcome difficult challenges,” Chief Executive Logan Green said during the company’s third-quarter earnings call in November.
See: Lyft lays off 13% of workers in second round of cuts this year
Green said on that call that the company’s efforts to reduce its workforce as well as rein in real-estate and operating costs “are expected to result in roughly $350 million of savings on an annualized basis.” He reiterated the company’s forecast of $1 billion in earnings before interest, taxes, depreciation and amortization (Ebitda) in 2024, and $700 million in free cash flow.
Lyft also reported last month that it saw pandemic-high demand and revenue in the third quarter. Co-founder and President John Zimmer told MarketWatch in an interview that “specific to ride-share and North American ride-share, the hardest part of the last few years is behind us.”
Some analysts aren’t reassured. Cowen & Co. recently downgraded Lyft’s stock to market perform from outperform, with analyst John Blackledge writing about his concern over rising auto-insurance costs — which he called an “industry issue” — plus inflationary and recessionary pressures. He also cut his price target for the stock to $14 from $36.
San Francisco-based Lyft went public on March 29, 2019, setting its initial public offering price at $72. Shares are now down more than 87% from their first-day closing price of $78.29, which is also their all-time high.
The stock of Lyft’s biggest competitor, Uber Technologies Inc.
has declined more than 41% this year. Meanwhile, the S&P 500 index
has fallen almost 20% year to date.