Will Lyft (LYFT) Collapse?

Many people will wonder if Lyft (LYFT) could collapse because the ride hailing app’s stock has lost most of its value.

For example, Lyft’s share price fell from $41.95 on 6 December 2021 to $10.32 on 7 December 2022. Hence, Lyft’s shares lost over three-fourths of their value in a year.

Moreover, Lyft has reported seven straight quarters of operating losses, Stockrow reveals. For instance, Lyft reported a -$205.04 quarterly operating loss on 30 September 2021. The quarterly operating loss grew to -$290.38 million on 30 September 2022. Plus, the quarterly operating loss rose to -$373.18 million on 30 June 2022.

Is Lyft (LYFT) Collapsing?

People will wonder if Lyft is collapsing because it is losing money and share value. Conversely, LYFT is gaining revenue.

For example, Lyft’s quarterly revenues grew from $864 million on 30 September 2021 to $1.054 million on 30 September 2022. Stockrow estimates Lyft had a 21.99% revenue growth rate in the quarter ending on 30 September 2022. That quarterly revenue growth rate fell from 72.89% in the quarter ending on 30 September 2022.

In contrast, Lyft’s quarterly gross profit fell from $391 million on 30 September 2021 to $364 million on 30 September 2022. Hence, Lyft is less profitable than it was last year.

Moreover, Lyft has fewer riders than in 2020. Lyft’s active ridership peaked at 22.9 million in the fourth quarter of 2021, Statista estimates. The ridership fell to 8.7 million in the second quarter of 2020 because of the COVID-19 pandemic. Lyft’s ridership recovered to 18.9 million in the third quarter of 2021 and fell to 18.7 million in the fourth quarter of 2021.  

Consequently, many investors will wonder if Lyft is in trouble.

Is Lyft in Trouble?

I think Lyft (NASDAQ: LYFT) because it burns cash. For example, Lyft reported four negative quarterly operating cash flows between December 2021 and September 2022.

The quarterly operating cash flow fell from $41.53 million on 30 September 2021 to -$26.22 million on 31 December 2021. The quarterly operating cash flow fell to -$152.34 million on 31 March 2022 and rose to -$26.20 million on 30 September 2022.

Similarly, the quarterly ending cash flow fell from $243.21 million on 30 September 2021 to -$30.73 million on 30 September 2022. However, the quarterly ending cash flow rose to $282.68 million on 31 March 2022.The quarterly ending cash flow fell to -$341.42 million on 31 December 2022.

Moreover, Lyft’s cash and short-term investments fell from $2.382 billion on 30 September 2021  to $1.785 million on 30 September 2022. So yes, Lyft could be in trouble.

How Much Debt does Lyft (LYFT) have?

The only good cash-flow numbers at Lyft (NASDAQ: LYFT) are the debt figures.

For example, Lyft reported several quarters of negative financing cash flow numbers ending on 30 September 2022. That indicates Lyft is paying debts. In particular, Lyft reported a quarterly financing flow of -$29.14 million on 31 September 2021 that grew to -$33.26 million on 31 September 2022.

Conversely, Lyft’s debts grew from $1.021 billion on 30 September 2021 to $1.107 billion on 30 September 2022. Thus, Lyft has more debt although it pays debts.

Interestingly, Lyft generates some money from investments. Its investing cash flow fell from $230.99 million on 30 September 2021 to $29.38 million on September 2022.

What Value Does Lyft (LYFT) Have?

Lyft (LYFT) has lost some value. For instance, its cash and short-term investments fell from $2.382 billion on 30 September 2021 to $1.785 billion on 30 September 2022.

Moreover, Lyft’s total assets fell from $4.824 billion on 30 September 2021 to $4.6 billion on 30 September 2022. Therefore, Lyft has less value, probably because of falling ridership.

I suspect COVID-19 hurt Lyft badly, perhaps fatally. I have to wonder if Lyft will collapse or get acquired because it is cheap. Potential buyers for Lyft include auto companies such as Telsa (TSLA), Alphabet (GOOGL), and banks.

Can Lyft Survive?

For example, Elon Musk could buy Lyft and use it to promote self-driving Tesla cabs if authorities let him put such vehicles on the roads. Similarly, Alphabet (GOOG) could buy Lyft and fold it into the Waymo self-driving vehicle company.

Waymo has tested self-driving cabs in Arizona. Moreover, Waymo has its own ride-hailing service called Waymo One. Waymo One serves drivers in Phoenix and could expand to San Francisco.

I have to wonder how Lyft could survive if Waymo expands nationwide. Remember, Waymo has Alphabet’s resources behind it. For example, Alphabet (GOOG) had $116.259 billion in cash and short-term investments on 30 September 2022.

I think Lyft (LYFT) cannot survive if a larger organization does mpt acquire it. I advise investors to avoid Lyft because I don’t think this company has the resources to survive.