Lyft Inc. (LYFT.O) signaled an easing in the price war with Uber Technologies Inc. on Wednesday, when it issued improved forecasts for sales and losses. The move buoyed both companies’ stocks.

Second-quarter results for Lyft were also better than expected. While sales growth is slowing, it’s doing so less rapidly than previously anticipated. Revenue in the second quarter reached $867.3 million, up 72 per cent from the year before. Analysts had expected 60% growth.

The ride-hailing company projects at least $3.47 billion in sales for the year, compared with an average analyst estimate of $3.32 billion, according to data compiled by Bloomberg. Lyft also narrowed its forecast for adjusted losses, which excludes debt, interest and other costs. Lyft said the loss for the year will be as much as $875 million, a $300 million decrease from an earlier projection.

Both Lyft and Uber trade below the price at which they went public this year, but Lyft was up 6% in pre-market trading in New York on Thursday, while Uber was up 4.6%.

The revised forecast indicates that Lyft will lose less this year on an adjusted basis than in 2018, Brian Roberts, the chief financial officer, said on a conference call after the financial report. In recent months, executives had said 2019 would be the peak year for losses. “It turns out last year was likely the peak loss,” Roberts said on Wednesday.

Investors are measuring the San Francisco-based company against a period of massive growth over recent years, when it capitalized on a series of missteps by Uber. Lyft’s larger rival reports its own financial results Thursday.

Enthusiasm for Lyft shares was dampened somewhat by a separate disclosure Wednesday. The company said shareholders who are currently restricted from selling stock would be able to do so starting Aug. 19. The date was earlier than anticipated, and investors worry an increase in sales will drive down the price.

But Wall Street remains optimistic about the companies’ prospects, despite persistent losses. Most analysts have buy ratings for the stocks. Lyft and Uber investors are betting they can upend the transportation industry and eventually find a path to profitability.

Both companies recently began to raise fares around the U.S., which is a main battleground accounting for almost all of Lyft’s sales. Lyft’s second-quarter loss increased 12 per cent to US$197 million, but the price increases should help narrow losses. For the third quarter, it projects a reduction of as much as 29 per cent, at US$190 million to US$210 million. “The price adjustments that have been reported went into effect at the very end of June, so there was limited impact in Q2,” Roberts, the CFO, said in a phone interview.

Investors will watch closely whether Lyft can continue to cut costs while maintaining revenue growth. “We’re trying to get a sense that the unit economics in ride-sharing are good and that we’re not going to have to wait forever for some realization of profitability,” said Tom White, an analyst at D.A. Davidson.

The financial report follows news last week that Lyft’s chief operating officer, Jon McNeill, was leaving after less than two years. The company provided few details about the reason for his departure. Lyft is currently facing public scrutiny over the safety of its service after the Washington Post and NBC’s Today show reported on allegations of harassment from female customers. Recent news raises questions about Lyft’s ability to differentiate from Uber, which has long struggled to retain high-profile executives and fend off criticism that it doesn’t do enough to ensure rides are safe.

For Lyft’s critics, there are still warning signs. When accounting for stock-based compensation, insurance costs and other expenses, Lyft’s net loss in the second quarter plummeted to US$644.2 million, from US$178.9 million a year earlier. Lyft reported a US$1.14 billion net loss in the first quarter, which was largely due to costs associated with the initial public offering in March.

Analysts hadn’t foreseen that Lyft would post another big net loss last quarter. They typically focus on Lyft’s adjusted figures, concluding that those numbers provide a better indication of the business’s long-term trajectory.