A typo in
Lyft’s
earnings release late Tuesday sent the stock on a wild ride and has, understandably, hogged the spotlight. But beneath the hood is a solid quarterly performance that has analysts turning more positive on the ride-hailing company.
To thank, at least in part, is Taylor Swift and Beyoncé.
Lyft
notched a net loss of $26 million on revenue of $1.2 billion in the fourth quarter, beating expectations among analysts surveyed by FactSet of a $69 million loss with revenue coming in just ahead of estimates.
Shares in Lyft advanced 37% on Wednesday in a rally that would mark its biggest-ever daily jump if the stock closes above that level. Albeit it’s not as impressive as the brief 60% move that came after a typo suggested profit margins would rise more than threefold.
“Lyft’s strategy early last year to lean in on pricing, on the customer experience and on product improvements as competitive differentiators bore fruit in [the fourth quarter],” wrote Youssef Squali, an analyst at Truist—who rates Lyft at Hold but with a price target lifted to $15 from $13—in a note late Tuesday. “Total rides growth accelerated for the fourth straight quarter, pointing to growing momentum in the business.”
Indeed, a standout in the release was a solid beat in gross bookings, a closely watched metric of the total value of customer transactions minus tips, which rose above $3.7 billion in the fourth quarter, outperforming consensus forecasts just below $3.7 billion. 2023 full-year gross bookings topped $13.8 billion, ahead of analyst expectations and up 14% from 2022 levels as the company delivered record rides on an annual basis.
“Last year, fans flocked to stadiums, with these rides growing by more than 35% year-over-year,” the company noted in its press release. This growth was “driven by high-attendance stadium events including Taylor Swift and Beyoncé concerts, the U.S. Open, and football games,” the company added.
Shareholders believing that there’s any bad blood with the company over its earnings typo should take heed of the strong performance in gross bookings—and perhaps thank Taylor Swift and Beyoncé. Analysts, at least, seem to be thinking about putting a ring on the stock.
While analysts surveyed by FactSet continue to rate Lyft at Hold, on average, a wave of price target increases have come rolling in since the results, with eight brokers raising their targets as of Wednesday. Though the average target price suggests limited upside from the levels implied by Lyft stock’s big premarket move, more analyst action could come.
Write to Jack Denton at [email protected]
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