LyftThe shares fell 34% Wednesday due to investors expecting short-term headwinds that would weigh down the company.

Lyft reported better-than-expected resultsAfter Tuesday’s bell, both top and bottom line numbers were reported. However, the company offered no guidance and stated that the company would continue to spend on driver incentive programs due to the rising cost of gas. Shares fell. The amount of investment the company intends to make and whether that will be continued into the second quarter are not known.

Additionally, the company will spend money on market tech and branding marketing.

Susquehanna analysts stated Wednesday in a note that the stock was downgraded because of the “softer near-term outlook”, need for more investments and many macro headwinds.

Nevertheless, analysts noted that some of the selling was exaggerated in the notes.

Piper Sandler analysts stated in a Tuesday report that “there’s no room to error in this environment but still, the selloff seems overdone.” We can see why stock prices are lower after the Q1 call, namely because of disappointing EBITDA guidance. Therefore we have reduced our price target in order to reflect the sector’s multiple compression and lower conviction regarding margins. The analysts said that they would still buy the post-Q1 weakness.

Canaccord Genuity stated Tuesday in a note that while shares are being affected by tempered revenues and prospects, the demand picture is improving, along with driver availability.

Analysts stated that “this marketplace balance will likely push prices lower and volumes higher, leading to robust growth for most of the year,” which should lead the stock to appreciate beyond COVID-inflicted territory.

— CNBC’s Michael Bloom contributed to this report.