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Here's Why You Should Hold Lyft (LYFT) Stock in Your Portfolio
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Lyft, Inc. (LYFT - Free Report) is benefiting from an uptick in driver supply and a solid liquidity position. However, escalating expenses are worrisome.
Factors Favoring LYFT
The company benefited from an uptick in driver supply. Highlighting the productivity of drivers, active drivers generated 17% more rides than three years ago. Driven by the 9.8% year-over-year rise in active riders, Lyft's top line increased in first-quarter 2023. For the second quarter of 2023, management expects revenues between $1 billion and $1.02 billion.
The company has a sound liquidity position. At the end of first-quarter 2023, its cash and cash equivalents totaled $1,754 million, much higher than the long-term debt of $793.42 million. This indicates that the company has enough cash to pay off its debt obligations.
Key Risk
Rising operating expenses pose a threat to the company's bottom line. Total costs and expenses climbed 13.2% year over year to $1.22 billion in first-quarter 2023.
Copa Holdings, which currently sports a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. Management expects the current-year load factor (percentage of seats filled by passengers) to be 85%, assuming the rosy traffic scenario continues. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 669% and 65% growth, respectively, on a year-over-year basis.
Allegiant, currently carrying a Zacks Rank #2 (Buy), also benefits from the buoyant air-travel demand. With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022. Management expects revenues to remain strong in 2023. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis.
For second-quarter and full-year 2023, ALGT’s earnings are expected to register 328% and 182% growth, respectively, on a year-over-year basis.
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Here's Why You Should Hold Lyft (LYFT) Stock in Your Portfolio
Lyft, Inc. (LYFT - Free Report) is benefiting from an uptick in driver supply and a solid liquidity position. However, escalating expenses are worrisome.
Factors Favoring LYFT
The company benefited from an uptick in driver supply. Highlighting the productivity of drivers, active drivers generated 17% more rides than three years ago. Driven by the 9.8% year-over-year rise in active riders, Lyft's top line increased in first-quarter 2023. For the second quarter of 2023, management expects revenues between $1 billion and $1.02 billion.
The company has a sound liquidity position. At the end of first-quarter 2023, its cash and cash equivalents totaled $1,754 million, much higher than the long-term debt of $793.42 million. This indicates that the company has enough cash to pay off its debt obligations.
Key Risk
Rising operating expenses pose a threat to the company's bottom line. Total costs and expenses climbed 13.2% year over year to $1.22 billion in first-quarter 2023.
Zacks Rank & Key Picks
Lyft currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Allegiant Travel Company (ALGT - Free Report) .
Copa Holdings, which currently sports a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. Management expects the current-year load factor (percentage of seats filled by passengers) to be 85%, assuming the rosy traffic scenario continues. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 669% and 65% growth, respectively, on a year-over-year basis.
Allegiant, currently carrying a Zacks Rank #2 (Buy), also benefits from the buoyant air-travel demand. With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022. Management expects revenues to remain strong in 2023. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis.
For second-quarter and full-year 2023, ALGT’s earnings are expected to register 328% and 182% growth, respectively, on a year-over-year basis.