$Lyft, Inc.(LYFT)$  bearish Lyft

Lyft is the no. 2 player in the U.S. ridesharing market. It generated $1 billion of revenue in the first quarter of 2023 from about 19.5 million active riders. On that revenue, it posted a net loss of $187.6 million.

The company managed to grow revenue by 14% year over year in the first quarter, but that growth came at a cost. Gross margin was 45%, down from nearly 50% in the prior-year period. Lyft attempted to keep operating costs in check, but total costs still rose nearly as fast as revenue. Scale is not helping.

Lyft's net loss is almost entirely due to stock-based compensation expense. The result of this excessive use of stock-based compensation is that Lyft's share count is expanding rapidly. The company's outstanding share count jumped 8% over the past year, diluting shareholders in the process.