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Lyft Gains as Unit Sale To Toyota Brings Profitability Nearer

imageStock Markets57 minutes ago (Apr 27, 2021 08:55AM ET)

(C) Reuters.

By Dhirendra Tripathi

Investing.com – Lyft (NASDAQ:LYFT) shares were trading higher by 3% premarket Tuesday after the ride-hailing company sold its self-driving unit to Toyota, shortening its path to profitability.

The company had said it expects adjusted EBITDA, a non-GAAP measure of basic operating profit, to be positive by the end of this year. The sale of its self-driving technology unit, Level 5, will move that date up to the third quarter, by removing $100 million of annualized operating expenses, the company said in a statement. The expenses chiefly reflect the unit’s R&D spend.

Lyft reported a net loss of $1.8 billion in 2020, narrower than the $2.6 billion it posted in 2019. The company has no forecasts for when it will post a net profit.

As of Monday’s close, Lyft’s shares are 8% off their 52-week high of $68.25.

Lyft said on Monday it had agreed to sell its self-driving vehicle division, Level 5, to Toyota for $550 million. Some $200 million of that will be paid upfront, with the rest coming over five years.

As per a note by Needham & Company analyst Bernie McTernan, Lyft is “a good company with secular tailwinds but a stock that is properly valued”. He rates it as ‘hold’.

Lyft Gains as Unit Sale To Toyota Brings Profitability Nearer

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