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Lyft (LYFT) Surges 16.9%: Is This an Indication of Further Gains?

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Lyft (LYFT - Free Report) shares rallied 16.9% in the last trading session to close at $17.17. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 24.3% loss over the past four weeks.

The uptick was partly due to rumors about a potential buyout. Rumors about Lyft's buyouthave not been substantiated and appeared only on Twitter and StockTwits.  General Motors, DoorDash and Ford may be the possible buyers. New York's decision to end mask mandate on public transit also may have boosted shares of this ridesharing company.

This ride-hailing company is expected to post quarterly earnings of $0.07 per share in its upcoming report, which represents a year-over-year change of +40%. Revenues are expected to be $1.05 billion, up 21.9% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Lyft, the consensus EPS estimate for the quarter has been revised 12.1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on LYFT going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Lyft is part of the Zacks Internet - Services industry. Shopify (SHOP - Free Report) , another stock in the same industry, closed the last trading session 3.1% higher at $31.94. SHOP has returned -23.7% in the past month.

Shopify's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0. Compared to the company's year-ago EPS, this represents a change of -100%. Shopify currently boasts a Zacks Rank of #5 (Strong Sell).


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