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Lyft (LYFT) Up 23.3% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Lyft (LYFT - Free Report) . Shares have added about 23.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Lyft due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Earnings Beat at Lyft in Q3

Lyft reported  third-quarter 2023 earnings (excluding 27 cents from non-recurring items) of 24 cents per share, beating the Zacks Consensus Estimate of 13 cents. In the year-ago period, it reported earnings of 11 cents.

Total revenues of $1,157.6 million surpassed the Zacks Consensus Estimate of $1,142.3 million. The top line rose 9.8% year over year, reflecting growth in the rideshare market. Active riders increased 10% year over year in the reported quarter to 22.4 million. 

Revenue per active rider decreased marginally year over year to $51.67. 

Adjusted EBITDA in the quarter under review totaled $92 million. Adjusted EBITDA was 2.6%.

Total costs and expenses plunged 11.1% year over year to $1.19 billion. Contributions climbed 4.5% year over year to $520 million. 

The contribution margin improved to 44.9% in the reported quarter from 47.2% a year ago. 

Q4 Outlook

Management expects gross bookings to be between $3.6 billion and $3.7 billion. Adjusted EBITDA is projected in the range of $50-$60 million. Adjusted EBITDA margin (calculated as a percentage of gross bookings) is anticipated to be between 1.4% and 1.6%.

LYFT forecasts fourth-quarter revenues to grow mid-single digits quarter over quarter. Adjusted EBITDA margin (as a percentage of revenues) is suggested to be roughly in line with the second-quarter 2023 level of 4%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted 33.66% due to these changes.

VGM Scores

At this time, Lyft has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Lyft has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Lyft belongs to the Zacks Internet - Services industry. Another stock from the same industry, Etsy (ETSY - Free Report) , has gained 27.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.

Etsy reported revenues of $636.3 million in the last reported quarter, representing a year-over-year change of +7%. EPS of $0.64 for the same period compares with $0.58 a year ago.

For the current quarter, Etsy is expected to post earnings of $0.78 per share, indicating a change of +1.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.3% over the last 30 days.

Etsy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.


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