Although Lyft stock (LYFT) outlook for the current year is not as bright as an initial typo in the company’s earnings report suggested, Wall Street was still pleased with the ride-hailing company’s fourth-quarter performance.
Wednesday witnessed a surge in Lyft stock after the late Tuesday earnings report. Notwithstanding a few disgraceful headlines. The correction of a typographical error in the earnings news release by the San Francisco-based company initially prompted a nearly 60% increase in the stock during aftermarket trading on Tuesday evening. In error, Lyft’s news release stated that the company anticipated a 5% year-over-year increase in adjusted margins, expressed as a percentage of gross bookings, by 2024, or 500 basis points. The error was 50 basis points, or 0.5 percent, the firm clarified during its earnings call. The admittance reduced Lyft’s after-hours surge of over 50% to approximately 18% by late Tuesday. However, Lyft stock increased by over 35% to close at 16.39 on Wednesday.
Earnings of Lyft Top Views
Wall Street analysts were impressed with Lyft stock despite the error, although the majority remain neutral on the stock as a whole. For the December quarter, the ride-hailing company reported an adjusted earnings per share of 18 cents on $1.22 billion in revenue. Analysts surveyed by FactSet anticipated that Lyft would generate an average of 8 cents per share on $1.22 billion in revenue. In the prior year period, Lyft incurred an adjusted loss of 76 cents per share, on the contrary, the organization disclosed sales of $1.18 billion.
Quarter Net Loss
The organization reduced its December quarter net loss to $26.3 million, from $588 million in the corresponding period of 2022. Additionally, Lyft reported that its ridership peaked at an all-time high in 2023, surpassing 40 million individuals. Lyft projected gross bookings of $3.55 billion for the current quarter, which represents the midpoint of its forecast range. That surpassed the $3.46 billion estimate put forth by analysts, as reported by FactSet.
Lyft Stock: “Still A Good One” Q4 Report
Lyft stated that it anticipates producing positive free cash flow for the entire year, marking a significant milestone on the path to profitability. Despite the error in the company’s margin expansion, the revised figure still provided reassurance to analysts. In a note to clients, RBC analyst Brad Erickson stated, “500 basis points of margin leverage would have been ideal, but 50 works just as well.” Erickson increased his price target for Lyft shares from 15 to 17, but maintained a neutral “sector perform” rating.
Price Targets
At least a dozen analysts increased their price targets for Lyft shares in response to the report. Nevertheless, Wall Street remains neutral on the stock as a whole. 74% of the 43 analysts who track Lyft maintain a rating of neutral or higher. Only 16% of investors recommend purchasing Lyft stock, while 9% advise against it, according to FactSet. Lyft’s stock has declined by over 80% since its initial public offering in 2019. It has been difficult for the business to compete with its significantly larger rival, Uber. Uber disclosed fourth-quarter earnings that significantly exceeded initial projections last week. Uber has also recently reported its initial annual profit.
Lyft Stock Technical Assessments
MarketSmith reports that Lyft stock surged significantly above its 21-day and 50-day moving averages with Wednesday’s surge. IBD Stock Checkup assigned Lyft stock an IBD Composite Rating of 72 out of 99 before the release of the report. The score is an intuitive aggregation of five distinct proprietary evaluations. In general, the highest-performing equities earn a score of 90 or greater. IBD Relative Strength Rating for Lyft is additionally 85 out of 99. The rating compares the 52-week price movement of a particular stock to that of other stocks in the IBD database. Additionally, Lyft stock has a B- Accumulation/Distribution Rating, suggesting that institutional purchases of shares outweigh sales.