A sign marks a meeting location for Lyft and Uber users at San Diego State University in San Diego, California, May 13, 2020.
Mike Blake | Reuters
Shares of Lyft rose to 11% on Wednesday as investors gathered around the company after saying it was recovering rideshare sooner than expected.
Lyft’s recovery also brought optimism to Uber shares, which rose to 5.8% on Tuesday on an otherwise poor day for tech stocks. It comes despite cautious comments from CEO Dara Khosrowshahi on Monday at the Morgan Stanley Tech conference, saying she expects her mobility business to see some signs of recovery in the US and Europe, although it is “too early to tell.” .
Lyft now expects to manage its first-quarter adjusted EBITDA loss of $ 135 million, from $ 145 million to $ 150 million, which it previously forecast, according to a file with the SEC on Tuesday. The company also said that the last week of February was the best week in terms of volume, since the pandemic blockades started in March 2020 and it is expected that the recovery will continue this month.
The company’s growing recovery comes as more states begin lifting Covid-19 restrictions and vaccines continue to roll out across the country.
“We believe that LYFT is ready to show a turn towards positive growth from year to year starting with the week of March 21, which we believe will accelerate in the summer months, except for possible countermeasures with the launch of the vaccine. a positive thing, especially considering the still uncertain landscape of pandemic and meteorological problems in certain regions “, according to CFRA analysts on Wednesday.
Truist analysts said Tuesday that updating the company’s business trends gives the company “increased confidence that business trends should continue to improve as local governments ease restrictions on social activities and people return to work with the declining C-19.” gradually ”.
“We believe that further easing restrictions, especially in Texas, which has completely reopened, could accelerate the improvement of Y / Y trends through the spring,” they added.
Uber and Lyft have remained optimistic, as they will be profitable by the end of this year on an adjusted EBITDA basis.
“Right now, LYFT is seeing encouraging demand and has managed to manage that demand as it moves toward improved profitability while showing solid execution,” Needham analysts wrote in a note to clients on Wednesday.
– CNBC’s Michael Bloom contributed to the reporting.
Subscribe to CNBC on YouTube.