  lyft’s stock price dropped despite announcing record revenue as investors continue to sell off companies that even slightly miss earnings   lyft has announced that it will cut 13 of its workforce to prepare for economic uncertainty saving about 350 million annually   investors were concerned because of a slowdown in active rider growth  lyft recently announced its earnings for the third quarter and investors quickly rode away from the stock rideshare companies have struggled over the past few years due to pandemic restrictions rising fuel costs and concern about a possible recession still looming over us there was hope that lyft would bounce back with stronger earnings this quarter lyft has been running one of the largest transportation networks in north america since 2012 while the ridebooking business took a hit during the pandemic folks are going out again with the number of active users jumping up to 203 million however the lyft earnings call led to the stock plummeting as much as 22 in the days that followed the news how did lyft’s earnings do lyft reported its financial results for the period ending september 30 on november 7 2022 here are some of the key financial highlights   the quarters revenue was 105 billion compared to analyst predictions of 1051 billion the revenue growth was 22 yearoveryear   the company had 203 million active riders in the quarter   adjusted ebitda during the quarter was 662 million   adjusted net income was 367 million versus an adjusted net income of 178 million in the third quarter of 2021   net loss for the quarter was 4222 million this figure includes 2241 million of stockbased compensation and related payroll tax expenses it’s worth mentioning that lyft had 229 million active riders in the last quarter of 2019 so it’s clear that demand has not fully returned to the prepandemic level just yet we’re unsure if this is because consumer spending habits have shifted or if competitors have gained a substantial market share lyft reported a record revenue per active rider of 5188 up 4 from the previous quarter this increase in revenue per rider was attributed to airport rides now that travel has returned it’s worth noting that uber announced 72 revenue growth yearoveryear to 83 billion for the same quarter uber also announced that gross bookings went up 26 yearoveryear while trips during the quarter shot up 19 to 195 billion which is about 21 million trips per day however investors were worried about the slowing active rider growth the company has struggled to return to the number of active riders they had in 2019 the growth rate was at 319 for the first quarter then 159 for the second quarter and now the most recent rate is at 72 at the same time this year the growth rate was 137 while it’s difficult to compare numbers directly since much of the growth has been impacted by the pandemic restrictions loosening up it’s still clear that investors were hoping for a higher growth rate this figure is important to investors because for revenue to increase the company needs more users on the app there are fears that users won’t be using ridehailing apps if they fear that a recession is on the horizon why did lyft shares drop after the positive report you would think that reporting record revenue would be a positive sign but the lyft share price dropped almost 23 in the days following the report here are some of the possible reasons for why lyft stock sank even further the main reason for the drop in share price was that the markets aren’t rewarding slow growth as some companies have struggled to beat analyst estimates even though lyft generated 105 billion in revenue this was a slight miss from the estimates of 105 billion one would think such a tiny miss wouldn’t make such an impact but the markets have been highly volatile in 2022 with wild fluctuations on any news it also seems like investors are quicker to sell stocks tied to consumer spending with the fears that high inflation is leading to a recession the competition is performing better the results from lyft didn’t look so strong compared to uber’s recent earnings report uber announced that sales for the third quarter went up 72 to 834 billion which exceeded analyst expectations of 81 billion uber’s monthly active users also rose to a new high of 124 million with 22 more people taking ridehailing trips for the quarter it’s worth noting that uber also offers food delivery services that help contribute to its revenue it’s impossible to assess the ridesharing industry without discussing increased gas prices due to global supply issues it was announced back in march that both uber and lyft were adding a fuel surcharge the russian invasion of ukraine impacted gas prices and lyft added a 55 cent surcharge to all rides for the 60 days gas prices have been fluctuating since and we can’t ignore the importance of fuel prices on ridesharing profits lyft was one of the businesses most impacted by pandemic restrictions because people were essentially ordered to stay home which significantly dropped the demand with restrictions loosening up people are attending more events and using ridebooking services to get around here’s what the company expects to report for the fourth quarter of 2022   revenue growth of 911 quarter over quarter and 1820 growth year over year the company is expected to cut about 350 million from annual spending here are a few considerations for lyft moving forward when we looked at recessionproof industries in the past it was clear that transportation companies are essential because consumer goods still need to be delivered however there’s uncertainty regarding how a ridehailing company would perform during a recession because people may think twice about going out for social reasons we can only speculate that any company relying on consumers spending their discretionary income would suffer during a recession in an attempt to improve its profitability lyft is laying off 13 of its workforce the company announced that it would be slashing about 700 people from the workforce the company has cited economic uncertainty as the main reason behind these cuts this has led to concerns over if the company sees business slowing down lyft executives responded by stating that the costcutting measures were being done in order to put the company in a position of maximum flexibility so that they can handle whatever may happen in 2023 unfortunately lyft isn’t the only company that has announced significant job cuts many giant tech companies have announced layoffs as we brace for a possible recession to hit in 2023 we will see if more layoffs are to come lyft stock is down 75 for the year closing last week at 1114 while many other tech companies have experienced steep share price declines this isn’t something we can ignore it’s evident that investors will be reacting unfavorably to any earnings misses as slow growth isn’t good enough many analysts are considering this stock a hold for now there’s too much uncertainty regarding the future of this industry as it relies on discretionary consumer spending we will have to stay tuned to see how the economy responds to the aggressive rate hikes that the fed is using to cool off the economy in positive news lyft stock went up by as much as 8 on november 11 as the positive cpi data came out the day before regarding the battle against inflation it looks like inflation is finally cooling down due to the aggressive rate hikes this news led to stocks rallying in hopes that inflation will cool down enough so the fed will slow down the rate hikes how should you invest there’s plenty of volatility and uncertainty in the markets lately as we continue to experience persistent rate hikes from the fed in an attempt to tame soaring inflation so it’s a particularly difficult time for investors the good news is that you don’t have to invest alone with the expertise of qai’s artificial intelligence investors can invest in trends and sectors that they think could produce longterm returns we can help you diversify with our active indexer kit target volatility and more safely buy the dip with bitcoin breakout or steady the ship with foundational kits you can also activate oneclick hedging with portfolio protection so that you can rest easy knowing that our ai is working to protect your assets we will have to monitor the situation to see how a company like lyft can perform during an economic downtown there are many factors at play here as the company is looking to make cuts while hoping that usage increases we have to see how consumer spending habits change and how rising fuel costs impact the company download qai today for access to aipowered investment strategies when you deposit 100 we’ll add an additional 100 to your account