Lyft gained a head start in oppose to its tech peers by becoming the first out of the “main suspects” to have officially issued their IPO, at the same time representing one of the tech companies with a status of “unicorns”.
Being a multi-billion-dollar worth company, Lyft had a chance to show to the public the great growth potential that this rideshare firm had showcased during the period of the last seven years since it was founded back in 2012.
Despite the fact that Lyft became the first of the unicorns to release the Initial Public Offering, previous performance is indicating that profits might be a weak side unlike the growth rate of the company.
Is Lyft’s Growth Rate Enough to Bring Profits to Investors?
Lyft showcased an amazing pace of growth during the course of the last year, as the tech company managed to double their profits when compared to the company’s balance sheet from 2017, scoring 2.2 billion dollars.
However, it has to be noted that Lyft also lost 600 million in cash balance during 2018 following operation costs, while the company’s data reports low prices per ride, with 3.56$ per one ride, which is below average.
In the meanwhile, Lyft might have an advantage in oppose to its main competitor, Uber, as the company has a strict focus on the ridesharing business, however, Lyft might not be able to make any significant profits that investors could benefit from in the course of the next 11 years.
This is the case, according to the statement provided by Lyft representatives, because the company may not be able “to generate taxable income” in the period during which the company could use NOLs.
NOLs for Lyft won’t come to the beginning of expiration process until 2021 for state NOLs and until 2030 on the federal level.