Lyft (NASDAQ: LYFT) stock has surged by over 30% in the wake of the company’s fourth-quarter earnings report. The ride-hailing giant beat Wall Street expectations and provided a bullish outlook for the current quarter.
Lyft (LYFT) reported adjusted earnings of 18 cents per share for the fourth quarter, which beat analysts’ expectations of 8 cents per share. Revenue for the period soared to $1.22 billion, marking a 4% increase from the previous year and aligning perfectly with analyst estimates. The number of rides surged by 26% to reach 191 million, attributed to increased trips to stadiums for concerts and sporting events.
Looking forward, Lyft anticipates even more remarkable growth, projecting gross bookings for the current quarter to range between $3.5 billion and $3.6 billion, beating the consensus estimate of $3.46 billion. In addition, the company foresees a significant increase in its adjusted profit margin for 2024, projecting a rise of 50 basis points to 2.1%, compared to 1.6% in 2023.
Typo Boosts Lyft Stock
Lyft stock skyrocketed by over 60% immediately after the earnings report due to a misinterpreted initial press release stating a 500 basis point margin expansion, later corrected by CFO Erin Brewer to 50 basis points during the earnings call.
Lyft also revealed its strategic initiatives for growth in the upcoming year, highlighting corporate partnerships with industry giants such as LinkedIn and Starbucks (SBUX). Moreover, the company anticipates generating positive free cash flow for the first time in 2024, attributed to reduced expenditures and a focus on cost-cutting measures.
Lyft said,
“Given these factors, along with our plans for slightly lower capital expenditures for 2024 relative to 2023, we anticipate that Lyft will generate positive Free Cash Flow for the full-year for the first time.”
The company’s focus on long-term profitability remains steadfast, and they have made efforts to optimize operations and staffing levels through a restructuring plan implemented last year.
Lyft (NASDAQ: LYFT) Stock Performance
LYFT stock jumped 35.12% to close at $16.39 on Wednesday. The traders had exchanged hands with 108,992,563 (108.99 million) shares compared to the average daily trading volume of 15.08 million.
