Lyft's Q4 Earnings Misses Expectations, Stock Plummets
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy LYFT?
Source: Fool
- Earnings Decline: Lyft's Q4 revenue of $1.59 billion fell short of Wall Street's $1.75 billion expectation, primarily due to a one-time legal, tax, and regulatory impact of $168 million, leading to decreased investor confidence in the company's long-term profitability.
- User Growth: Despite the revenue miss, Lyft reported an 18% increase in active riders, with management guiding for a similar 18% growth in gross bookings for Q1, indicating ongoing potential for expansion in its user base.
- Market Reaction: Lyft's stock plummeted 16.97% today, closing at $13.99, with trading volume reaching 73.1 million shares, approximately 398% above its three-month average, reflecting market concerns about the company's outlook.
- Future Outlook: Management anticipates generating over $1 billion in free cash flow by 2027, and with a current market cap of just $5.6 billion, Lyft is still viewed as a discounted growth story, continuing to attract investor interest.
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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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- 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.
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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.
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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
