A volatile week on Wall Street saw shares of Lyft and Expedia fall.
Wall Street experienced a challenging week, and on Friday, investors were eager for the weekend. The Nasdaq Composite had a fall of more than 1% at midday ET, while other major market indices registered increases.
Lyft Has Problems in the Competitive Market
Following the release of Lyft’s most recent financial report, the company’s stock experienced a dramatic decline of 36%. Despite a YoY growth in revenue of 21% to $1.18 billion, the firm lost more than twice as much money ($588 million). Additionally significantly greater than losses from the previous year were the adjusted pre-tax operating losses of $248 million. Losses were mostly caused by a provision for boosting insurance reserves.
A 9% YoY increase in active rider counts to 20.36 million and an 11.5% increase in per-rider income from the prior year also indicated slowing growth in the company’s operations. Investors, however, were unimpressed by the company’s mediocre projection, which predicted only $975 million in revenue for the first quarter of 2023. Because of this and rival Uber Technologies’ improved profitability, Lyft stockholders are concerned about the level of industry competition.
Despite important business metrics, Expedia Group’s stock declines.
With an 8% drop in share price on Friday, Expedia Group also suffered a blow. Investors were unsatisfied even though the company’s Q4 2022 financial report showed a 15% YoY rise in revenue to $2.62 billion and a 17% increase in gross bookings. The number of nights booked by the firm increased by 19%, while adjusted net income increased by 17% to $196 million.
Expedia’s income is mostly derived from services linked to accommodation, and in Q4 2022, that revenue rose by 18%. The sector has advanced since 2021 as a result of passengers getting back on the road as seen by the full-year increases of 38%. In a challenging advertising environment, the business also reported a 15% growth in advertising and media income. However, late in the quarter, weather-related travel interruptions were blamed for the decline in Expedia’s stock. However, industry observers predict that in 2023, things will be better for the tourism sector.