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How Damaging is Coronavirus for Lyft's (LYFT) Q2 Earnings?

Lyft LYFT is scheduled to report second-quarter 2020 results on Aug 12, after market close.

The Zacks Consensus Estimate for second-quarter loss has widened by 6.8% in the last 60 days. Now, let’s take a look at the factors that are expected to have influenced the company’s second-quarter performance.

With coronavirus restricting people to their homes, the company’s operations have been hurt significantly due to a dramatic drop in ride volumes. This weakness is expected to get reflected in Active Riders (riders who take at least one ride during a quarter on Lyft’s multimodal platform through its app) and Revenue per Active Rider. The Zacks Consensus Estimate for second-quarter total revenues indicates an approximate 70% decline from the year-ago reported figure.

Similar to the first quarter, total costs are anticipated to have decreased in the second quarter. This, in turn, is likely to have supported the bottom line, thus partly offsetting the revenue decline due to softness in rides. Lyft does not expect adjusted EBITDA loss for the second quarter to have exceeded $325 million.

Earnings Whispers

The proven Zacks model does not conclusively predict a beat for Lyft this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. However, that is not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Lyft has an Earnings ESP of -8.37% as the Most Accurate Estimate is pegged at a loss of $1.7, wider than the Zacks Consensus Estimate of a loss of $1.57.

Zacks Rank: Lyft carries a Zacks Rank #4 (Sell).

Highlights of Q1 Earnings

In the last-reported quarter, Lyft incurred a loss of 32 cents per share, narrower than the Zacks Consensus Estimate of a loss of 56 cents. Despite coronavirus woes, results were aided by a 23% year-over-year rise in revenues, courtesy of increase in Active Riders and Revenue per Active Rider. Total revenues of $955.7 million surpassed the Zacks Consensus Estimate of $864.4 million.

Stocks to Consider

Investors interested in the broader Computer and Technology sector may consider ANGI Homeservices ANGI, Cambium Networks Corporation CMBM and Fabrinet FN as these stocks possess the right combination of elements to beat on earnings this reporting cycle.

ANGI Homeservices has an Earnings ESP of +100% and a Zacks Rank #2. This company will release second-quarter 2020 financial numbers on Aug 10. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cambium Networks has an Earnings ESP of +24.73% and a Zacks Rank #3. The company will announce second-quarter 2020 earnings numbers on Aug 11.

Fabrinet has an Earnings ESP of +3.75% and a Zacks Rank #3. The company is set to release fourth-quarter fiscal 2020 (ended Jun 26, 2020) results on Aug 17.

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