Lyft Inc. shares fell sharply Wednesday, a day after the ride-hailing company reported results that included a 125% increase in revenue amid a continued recovery from the COVID-19 pandemic, but softer than expected guidance.

After rising as much as 6% in extended trading Tuesday, Lyft

shares were down more than 9% at midday Wednesday to $50.39. They’re on pace for their worst day since April 29, when they fell 9.94%.

The company continues to deal with effects from the pandemic, which Chief Financial Officer Brian Roberts said on the earnings call is “not over yet, especially with especially with emerging variants and a return of restrictions in certain markets.”

Full earnings coverage: Lyft more than doubles sales in ‘exceptional’ quarter, but stock gains disappear after forecast

Lyft expects to continue to spend on incentives to lure drivers back to its platform and/or retain them, with Roberts saying he expects a $30 million to $40 million hit on revenue in the third quarter from those incentives.

“The commentary regarding further incremental driver incentive investments may spook some investors that the intensity there may remain high into next year,” wrote Brad Erickson of RBC Capital Markets in a note to investors.

But he also reiterated his “outperform” rating on the stock and said investors should think long term: “We believe these forces remain entirely transitory and would urge investors to look through to next year where we expect Lyft to be on a path towards hundreds of millions of dollars of Ebitda.”

Mark Mahaney of Evercore ISI, who also reiterated an outperform rating, wrote that “challenges remain, with service levels (i.e. ride availability, wait times and ride pricing) still not optimal. And we believe that Lyft will have to lean aggressively into driver incentives for another quarter or two to rebalance the marketplace, until organic tailwinds (vaccines, full re-openings, work & school commutes, airport trips, etc. …) fully re-engage.” 

Another read of the results warns about growth. While the company reported that second-quarter revenue ($765 million) more than doubled year over year, that was compared with the quarter that included the height of the pandemic last year. That figure was nearly 12% lower than the company’s second-quarter revenue of $867.3 million in 2019.

“User growth is already showing signs of slowing growth, if either engagement growth (rides/user) or pricing power fail to materialize LYFT’s revenue outlook could shrink,” wrote Mark Shmulik of Bernstein, who has a “market perform” rating on the stock.

Analysts’ mentions of the company’s first quarter of Ebitda profitability and expectations of continued profitability attribute it to the adjustments Lyft made during the pandemic.

“Lyft used this downturn to improve its cost structure and tap into new business opportunities,” wrote Brian White of Monness Crespi Hardt.

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