Shares of Lyft Inc. (NASDAQ: LYFT) were up 8% in afternoon hours on Wednesday. The stock has gained 53% over the past 12 months and 25% since the beginning of this year. A day ago the company provided an update on its business trends for February as well as its outlook for the first quarter of 2021.
February ride volumes
Average daily rideshare ride volume was up 4% month-over-month compared to January 2021. The first quarter is typically subject to unpredictable weather which could impact rides, and the week ending February 21st saw several US states affected by severe winter storms.
The average daily rideshare ride volume in February, excluding the week ending February 21st, rose 5.4% compared to January. Rideshare ride volume during the week ending February 28 reached a new record for 2021 and was the best week since March 2020.
Lyft expects average daily rideshare ride volume for the first quarter of 2021 to exceed that of the fourth quarter of 2020. The company also expects to see three consecutive months of average daily rideshare ride growth in the first quarter. This is a positive trend compared to Q4 when the company saw sequential declines in ride volumes during November and December.
Lyft expects rideshare ride volume to improve on a year-over-year basis from the week ending March 21, 2021. This growth trend is expected to continue through the remainder of 2021 unless the COVID-19 pandemic situation worsens.
Lyft expects rideshare rides for the first quarter to be flat or slightly down compared to the fourth quarter of 2020. Q1 has two fewer days than Q4. If the number of days were equal in both quarters, it would have resulted in a slight increase in rideshare ride volume quarter-over-quarter.
Lyft now believes it can bring down its adjusted EBITDA loss in Q1 to $135 million compared to its previous outlook of $145-150 million. This improvement is mainly a result of reduction in operating expenses.