Lyft (NASDAQ: LYFT) stock surged on Thursday following multiple analysts’ decision to raise their price targets post-upbeat fourth-quarter results.
Lyft (LYFT) has released a better-than-expected financial results for the fourth quarter on Tuesday. The ride-hailing giant reported adjusted earnings of 18 cents per share, stunning analysts who had predicted only 8 cents per share. Revenue for the quarter reached $1.22 billion, reflecting a 4% rise from the prior year and closely aligning with analyst forecasts. The number of rides also witnessed a 26% surge, totaling 191 million.
The revelation of these positive financial outcomes has triggered a significant shift in sentiment among analysts towards Lyft’s stock.
Truist Securities on Lyft
Youssef Squali, an analyst at Truist Securities, opted to uphold a Hold rating but adjusted the price target upward from $13 to $15.
In a note, Squali mentioned that Lyft’s approach at the beginning of the previous year, focusing on pricing, enhancing the customer experience, and making product improvements as competitive advantages, yielded positive outcomes in the fourth quarter of 2023. The results demonstrated a notable increase in ride number and frequency, indicating accelerated growth.
He added,
“A healthier marketplace and sustained momentum QTD bodes well for 1Q, driving higher than expected guidance, while directional 2024 commentary reflects a better growth outlook.”
RBC Capital Markets on Lyft
At the same time, Scott Devitt, an analyst at RBC Capital Markets, reaffirmed a Sector Perform rating and increased the price target from $15 to $17.
Devitt noted that Lyft’s fourth-quarter report highlighted the company’s enhanced competitive position and effective management of expense drivers, such as incentives and insurance costs, indicating a more stable footing in the market.
He further commented that Lyft is now competing with Uber Technologies Inc (NYSE: UBER) on a much more competitive level. The analysts reaffirmed,
“Our estimates are being driven higher by a robust outlook and improved visibility into margin expansion.”
Lyft (NASDAQ: LYFT) Stock Reaction
LYFT stock jumped 16.11% to close at $19.03 on Thursday. The traders had exchanged hands with 90,964,988 (90.96 million) shares compared to the average daily trading volume of 16.48 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
