ROTH MKM Managing Director Rohit Kulkarni sits down with Yahoo Finance Live to talk about ride-share leader Lyft's latest earnings report, its revenue growth amid heightened competition with Uber, and acquisition potentials.

Video Transcript

- Joining us now to break down lip's earnings, Roth MKM's Managing Director Rohit Kulkarni. Nice to see you, sir. So what do you see in this earnings report? Are you surprised, at all, by that type of investor reaction?

ROHIT KULKARNI: Hey, thanks for having me. I think the reaction is based on what happened prior to the earnings result. People tend to forget that the stock was up 60%, maybe 65% since December lows. Again, now, was there a specific reason why the stock was up? The market is up. NASDAQ is outperforming. And then all the tech companies are going up 30%, 40%, 50%.

So Lyft was up as part of that wave. So what they needed to do was expectations had been grinding higher. And they needed to just jump over those higher expectations. In isolation, 4Q numbers are not that bad. They are actually better than what we had expected. 1Q guidance is much more worse than what we had expected.

But again, whether this reaction is in line with this weakening of fundamentals, I don't think so. It is just mostly based on what happened prior to this. The stock was up 65%. I am not surprised that it is going to give up some of those gains.

The company's making progress towards profitability. But again, it is just slow progress. And it is much, much slower than what Uber is showing us.

- So Rohit, in regards to the reaction here, because revenue guidance, it was late. It might have been better than what you were expecting. But in terms of Street consensus, we're expecting to see Q1 revenue of $975 million. The estimate out there was for about $1.1 billion. So $975 million, that, of course, would be a step down from what we saw last quarter. How does that set us up, then, into this new year? Clearly, investors are a bit skeptical about Lyft, its ability to compete with Uber. What's going to change investor sentiment on Lyft?