Lyft which is an app based ride-hailing company and its shares have got a boost after the company was analyzed by experts to be a company that could be profitable earlier than expected.
The shares of Lyft jumped 4.3 % after the analysts Jake Fuller and Ali Faghri had estimated that the company will be turning profitable by the year 2021, which is earlier than 2023 as it was earlier expected. This happens directly after the increase of its latest price.
The investors were earlier having qualms over the company possibly making losses but this report has certainly squashed some of those qualms. After its public debut in the month of March, the shares of the company have fallen almost 30%. It is being worried by a few investors that the reliance of the company operates on policies such as discounts on fare and subsidies to drivers to compete with its competitors It may in that case happen that many have believed will keep profitability away.
The company however is now making every effort possible to have a reversal in fortunes as earlier in the month, Brian Roberts who is the financial chief said that the increase in prices happened on a few routes in a few cities in June but there were no details on why and how much of it was done.
Investors have also argued that the increase in price may lead to a loss of many customers however the analysts who belong to Guggenheim have said that the demand is not expected to be hit.
The increased prices along with a limited impact on demand were cited as the major reason why the company is expected to turn profitable soon.