On Tuesday Lyft shares were trading higher by 3%, after the ride-hailing company sold its self-driving unit to Toyota, shortening its path to profitability. The company had declared that 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 prediction 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’.