Lyft’s stock has dropped 30% due to weak forecasts

Lyft stock fell 29.9% on Wednesday as investors expected the firm to face short-term difficulties.

After the bell on Tuesday, Lyft posted better-than-expected top and bottom-line results. However, because to rising gas prices, the business offered low second-quarter guidance and indicated it would have to continue spending on driver incentives, sending shares plummeting. It’s unclear how much the corporation intends to invest or if it would do so in the second half of the year.

In addition, the company will invest in marketplace technology and brand promotion.

“We believe the lower near-term outlook, need to raise investments, and various macro headwinds will weigh on shares in the near-term, prompting us to go to the sidelines,” Susquehanna analysts wrote in a report downgrading the stock on Wednesday.