Lyft Stock Plummets 14.1% After Q4 Earnings Miss Expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy LYFT?
Source: Fool
- Sales Miss Expectations: Lyft's Q4 sales totaled $1.6 billion, falling short of analysts' expectations of $1.75 billion, resulting in a 14.1% drop in stock price during early trading, reflecting market disappointment with the company's performance.
- Distorted Earnings Data: Although Lyft reported earnings of $6.81 per share, this figure benefited from the release of a valuation allowance, making it unsustainable for future quarters, leading investors to pay less attention to this number.
- Overall Performance Weakness: Lyft's full-year gross bookings grew 15% to $18.5 billion, while revenue only increased by 9% to $6.3 billion, indicating negative impacts from legal, tax, and regulatory reserve changes, raising concerns about the company's future growth prospects.
- Cash Flow Growth: Despite challenges, Lyft generated $1.1 billion in free cash flow in 2025, a 47% year-over-year increase, demonstrating that its cash flow is growing faster than sales and bookings, with bookings expected to continue growing at a high rate, suggesting the stock remains attractive at a 6x price-to-free cash flow ratio.
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Analyst Views on LYFT
Wall Street analysts forecast LYFT stock price to rise
29 Analyst Rating
7 Buy
20 Hold
2 Sell
Hold
Current: 13.050
Low
16.00
Averages
24.06
High
32.00
Current: 13.050
Low
16.00
Averages
24.06
High
32.00
About LYFT
Lyft, Inc. is a global mobility platform offering rideshare, taxis, private hire vehicles, car sharing, bikes, and scooters across North America and Europe. It operates across 11 countries and in nearly 1,000 cities, and Lyft Urban Solutions supports bike sharing in 16 countries and more than 86 cities. Its Lyft mobile application (the Lyft App) connects riders with drivers for on-demand ride services and supports a variety of other multimodal mobility solutions. Its offerings on the Lyft App include an expanded set of transportation modes in select cities, such as access to a network of shared bikes and scooters (Light Vehicles) for shorter rides and first-mile and last-mile legs of multimodal trips. FREENOW by Lyft is the European taxi app featuring broad multi-mobility options. Through FREENOW, passengers can access various mobility services within a single app, including taxis, private hire vehicles, car sharing, car rental, e-scooters, e-bikes, e-mopeds, and public transport.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Future Strategic Focus: The company plans to invest heavily in autonomous vehicles, demonstrating foresight in technology innovation and market trends aimed at enhancing competitive positioning.
- Business Transformation: Lyft's evolution from a ride-hailing app to a fleet management company reflects its ability to diversify its business model and adapt to market changes, potentially creating new revenue streams.
- Investor Attention: As analysts closely monitor the balance between growth and profitability, Lyft's stock is likely to become a focal point for investors, influencing its market performance going forward.
See More
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- Mixed Industry Results: Automakers reported mixed earnings, with some industrial stocks outperforming the broader market; however, overall equity demand remains capped, indicating a growing risk-off sentiment among investors.
- AI Panic Trade: The launch of a new freight efficiency platform by an AI firm has spooked markets, leading to sharp declines in traditionally resilient trucking and logistics stocks, as fears grow over the vulnerability of labor-intensive business models to automation.
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See More
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- Revenue Growth: Lyft reported double-digit growth in both revenue and rides, indicating potential for market share expansion, which could lay the groundwork for future profitability despite negative market reactions.
- Buyback Program: The announcement of a $1 billion share buyback program aims to bolster shareholder confidence and enhance earnings per share, which, while the stock price has fallen in the short term, may positively impact shareholder returns in the long run.
- Autonomy Progress: The company continues to advance its autonomy plans, with expectations to grow the addressable market to over $1 trillion in the long term, providing Lyft with greater competitive opportunities in the future.
- Market Value Assessment: Despite the current poor stock performance, analysts believe Lyft remains one of the best value investments in the market today, especially given its ongoing revenue growth and market potential.
See More
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- Stock Price Decline: Lyft's shares dropped over 15% on Wednesday following disappointing earnings results, leading to negative investor sentiment; however, the current oversold condition may attract buyers back into the market.
- Oversold Indicator: The Relative Strength Index (RSI) indicates that Lyft is in an oversold territory, suggesting a potential rebound; traders often employ mean reversion strategies, anticipating price corrections that could drive the stock higher.
- Support Level Analysis: Lyft's stock has fallen to a previous support level of $13.30, which historically marked a reversal point, indicating that many investors may look to repurchase shares at this price, creating a price floor.
- Increased Buying Interest: As the stock approaches this support level, remorseful sellers may place buy orders, and if their buying interest intensifies, it could lead to a new upward trend for Lyft's stock price.
See More
