Shares of Lyft Inc (NASDAQ: LYFT) crashed over 30% in extended trading on Thursday after the ride-hailing company cited “seasonality” and issued weak guidance for its current financial quarter.
Is it a suitable time to invest in Lyft stock?
Lyft expects $975 million in revenue on $5.0 million to $15 million of adjusted EBITDA, as per the earnings press release. In comparison, analysts had forecast $1.09 billion and $81 million, respectively.
But that isn’t enough to make Wedbush Securities’ Dan Ives lose conviction in the Lyft stock. Sticking to his $17 price target on CNBC’s “Closing Bell: Overtime”, he said:
Lyft continues to be the little brother to Uber. We’re seeing massive recovery in drivers that’s been a big issue from a supply perspective. We’re still confident on the overall opportunity in ride share.
Ives did caution, though, that the company has to improve its EBITDA in the back half of the year. If not, the “story will change”. Earlier this week, peer Uber Technologies Inc reported progress in terms of profitability (source).
Notable figures in Lyft’s Q4 earnings report
- Lost $588.1 million versus the year-ago $283.2 million
- Per-share loss also climbed from 83 cents to $1.61
- Adjusted loss printed at 74 cents on a per-share basis
- Revenue jumped 21% year-over-year to $1.18 billion
- Consensus was 13 cents EPS on $1.15 billion in revenue
- Adjusted EBITDA of $126.7 million was well above estimates
Active riders increased in the recent quarter to 20.4 million – slightly above estimates. Revenue per active rider of $57.72 also topped expectations by just over $1.0. Including the after-hours price action, Lyft stock has now returned to the level at which is started the year 2023.
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