Lyft's stock fell 17% in premarket trading on Wednesday. The decline followed the ride-hailing company's quarterly profit forecast and annual ride volume both falling short of Wall Street's targets, highlighting a setback in its efforts to sustain a recent turnaround to profitability.

Despite Lyft improving its profit margins, expanding its international operations, and announcing a new $1 billion stock repurchase program, the growth in its ride volume—a key indicator of market momentum—is losing steam amid competition.

Influenced by severe winter weather in the United States and seasonal costs, Lyft projected its first-quarter adjusted core profit would be lower than expected. The company also reported an unexpected operating loss for 2025.

"Lyft's results and guidance were weaker than anticipated, reinforcing the underlying challenges it faces as it strives to find sustained, profitable growth while competing with larger, more diversified global players like Uber," analysts at Morgan Stanley noted.

Over the past two years, Lyft has made progress in profitability and cash flow. However, Wall Street believes it remains difficult for the company to maintain ride growth momentum in the face of Uber's scale.

In 2025, Lyft completed 945.5 million rides, falling short of the 958.4 million rides anticipated by Visible Alpha. The fourth quarter, typically a seasonally strong period for ride-hailing demand, saw the company complete 243.5 million rides, below market expectations of 256.3 million.

Jefferies suggested that Lyft's subdued growth may indicate market share losses, especially given Uber's faster growth rate in U.S. mobility. The firm warned that prioritizing short-term profits over rider growth could harm long-term profitability.

The annual growth rate of ride volume has also slowed. Growth decelerated from 18.5% in 2023 to 14.2% in 2025, raising questions about the pace of demand growth in North America.

To counter slowing domestic growth, Lyft expanded into Europe last year through the acquisition of Freenow. This move allowed the company to enter new international markets and reduce its reliance on North America.