Lyft Stock News: LYFT accelerates by 35% despite margin typo


  • LYFT stock gains over 35% on Wednesday following margin expansion snafu.
  • Management said adjusted EBITDA would expand by 50, not 500, basis points in 2024.
  • Earnings and revenue outpaced consensus for the fourth quarter.
  • Net income losses greatly plunged from a year ago for the rideshare company.

 

Don't let anyone tell you that mistakes can’t sometimes improve a situation. Lyft (LYFT) stock, the rideshare competitor to Uber (UBER), has benefited dramatically on Wednesday from a typo in its fourth-quarter earnings results.

Lyft stock closed up 35.1% to $16.39 on Wednesday, while Uber stock jumped 14.7% on the announcement that it will buy back up to $7 billion in stock. Uber stock was already surging prior to the buyback announcement due to Lyft's soaring stock price. The NASDAQ and S&P 500 advanced 1.3% and 0.96%, respectively.

Upon initially releasing its fourth-quarter earnings report late Tuesday, a statement from Lyft said that adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) would expand in 2024 by 500 basis points. LYFT stock rocketed afterhours on Tuesday due to that typo, and at one point the spike climbed above 60%, before management corrected the sentence to say 50 basis points.

Lyft stock earnings news

Still, Lyft stock has gained more than 35% on Wednesday in the aftermath of the basis point flub, and it is hard to argue that initial euphoria regarding the typo did not play some part in Wednesday’s share price spike.

Of course, there was ample speculation that heavy shorting prior to the earnings release had led to a short squeeze, causing the shorts to repurchase stock in order to close out their positions. About 13% of the LYFT float was held short in the lead-up to earnings.

The fourth quarter results themselves were quite good though. Adjusted earnings per share (EPS) in the fourth quarter reached $0.16 per share — an 8-cent beat. GAAP EPS was $-0.06, which beat Wall Street consensus by 12 cents. The company’s net loss fell from $588 million in the previous year’s quarter to a loss of $26 million in Q4 2023.

Revenue rose 4% YoY to $1.22 billion, which narrowly beat Wall Street consensus by $3 million. But gross bookings hiked 17% from a year ago to $3.7 billion.

Q4 total rides rose 26% from a year prior to 191 million. Additionally, Lyft’s total number of rides in 2023 of 709 million rose 18% from 2022.

 

EV stocks FAQs

What are electric vehicles?

Electric vehicles or EVs are automobiles that use rechargable batteries and electric motors to accelerate rather than internal combustion engines (ICEs). They have been around for more that 100 years, but battery technology research & development was meager for much of the 20th century. Lithium-ion battery technology became advanced enough to produce EVs at scale in the late 1990s and 2000s, and sales have been steadily increasing since then Tesla’s Roadster was unveiled in 2008. EVs are viewed as a means of reducing carbon emissions since battery electric vehicles (BEVs) themselves produce zero emissions. Other vehicles called plug-in hybrid electric vehicles (PHEVs) utilize both battery electric power and ICEs as a backup.

What is the market share held by EVs?

EVs are growing from a small base, but they rose from 9% of global new auto sales in 2021 to 14% of the total in 2022. This was a 65% YoY growth rate, and the industry delivered 10.2 million EVs worldwide in 2022. Projections show this number climbing above 16 million in 2023. Across the world, market shares differ greatly among nations. Nearly 88% of Norwegian new car sales in 2022 were EVs. On the other hand, the United States, where much of the modern innovation in EVs was forged, had less than 8% of new vehicle sales go to EVs in 2022. The largest EV market in the world, China, saw 30% of the market go to EVs that year.

Who is the father of the EV?

We know you’re thinking Elon Musk, but he’s probably more like the father of the mass-market, contemporary EV. All the way back in 1827, a Hungarian priest named Anyos Jedlik invented the electric motor and used it the following year to power a vehicle of sorts. French scientist Gaston Planté invented the lead-acid battery in 1859, and German engineer Andreas Flocken built the first true electric car for the public in 1888. EVs made up about 38% of all vehicles sold in the US around 1900. They began losing market share rapidly after 1910 when gasoline-powered vehicles grew much more affordable. They largely died off until new research programs in the 1990s led to gradual private sector investment in the 2000s.

Who are the biggest makers of electric vehicles?

China’s BYD is by far the largest manufacturer of EVs in the world. In 2022 it sold 1.8 million EVs and in the second half of the year made up 20% of the global market. The asterisk given to BYD is that the vast majority of these vehicles are hybrids. Tesla’s 12% market share is often treated as more significant than BYD, because it only sells BEVs and is the most famous EV brand in the world. Volkswagen, BMW and Wuling then round out the top five. As a new sector with heavy investment though, many startups have flooded the market. These include China’s Nio, Li Auto and Xpeng; a Swedish-Chinese manufacturer called Polestar; and Lucid and Rivian from the US.

Lyft stock forecast

Lyft stock reached a one-year high on Wednesday at $16.77. LYFT stock has not traded at that latitude since February 9, 2023. After traders took some profits off the table on Wednesday, LYFT stock has settled in after lunchtime just below the December 18 high of $15.95.

A close above that prior range high will hearten bulls to hold onto the stock, which could persaude the party to continue. However, a descent to support at the 50-day Simple Moving Average (SMA), which is currently trading near $13.50, would still amount to needed consolidation before a further leg up.

LYFT daily stock chart

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD extends sideways grind below 1.0900

EUR/USD extends sideways grind below 1.0900

EUR/USD stays in a consolidation phase below 1.0900 following the previous week's rally. In the absence of high-tier data releases, the US Dollar stays resilient against its rivals as investors scrutinize comments from central bank officials. 

EUR/USD News

Gold pulls away from record highs, holds above $2,400

Gold pulls away from record highs, holds above $2,400

Gold rose sharply at the beginning of the week on escalating geopolitical tensions and touched a new all-time high of $2,450. With market mood improving modestly, XAU/USD erases a majority of its daily gains but manages to hold above $2,400.

Gold News

GBP/USD holds steady near 1.2700, Fedspeak in focus

GBP/USD holds steady near 1.2700, Fedspeak in focus

GBP/USD fluctuates in a narrow channel near 1.2700 on the first trading day of the week. The cautious market stance helps the US Dollar hold its ground, while market participants assess remarks from central bank officials ahead of this week's key events.

GBP/USD News

Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing

Ripple stays above $0.50 on Monday as firm backs research on blockchain and quantum computing

XRP price holds steady above the $0.50 key support level and edges higher on Monday, trading at 0.5130 and rising 0.70% in the day at the time of writing.

Read more

Week ahead: Nvidia results and UK CPI falling back to target

Week ahead: Nvidia results and UK CPI falling back to target

What a week for investors. The Dow Jones reached a record high and closed last week above 40,000, for the first time ever. This is a major bullish signal even though gains for global stocks were fairly modest on Friday, and European stocks closed lower. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures