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LYFT Stock Moves Higher on Encouraging Targets for 2027

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Shares of ride-sharing operator Lyft Inc. (LYFT - Free Report) performed well on the bourse on Jun 6, 2024, closing the trading session at $15.69 per share, up 1.03% from the previous day's closing. In fact, shares were up in excess of 10% at one point of time during yesterday's trading session. The upside was due to the rosy 2027 targets offered by management at its investor day conference.

Lyft anticipates gross bookings compound annual growth rate of almost 15% between 2024 and 2027. Adjusted EBITDA margin (measured as a percentage of gross bookings) is expected to be around 4% on a full-year basis in 2027. Free cash flow conversion (measured as a percentage of adjusted EBITDA) is estimated to be more than 90% annually each year between 2025 and 2027.

Lyft’s chief executive officer, David Risher, stated, “Lyft’s customer-obsessed strategy is working. Our execution keeps getting better, we’re delivering industry-leading innovation, and we are working closely with partners to create great shared customer experiences. We’re excited to share our vision for Lyft’s road ahead.”

Lyft’s chief financial officer, Erin Brewer, stated, “Over the last year we’ve transformed our business and established a strong foundation for improving profitability and cash flow. The financial targets we are announcing today reflect our expectations of healthy top-line growth and margin expansion as we deliver on our strategic priorities. I’m excited about Lyft’s next chapter as we continue building a financially healthy and customer-obsessed Lyft.”

Lyft has reaffirmed itspreviously announced guidance for second-quarter 2024 and full-year 2024, which were updated during the company’s first-quarter 2024 earnings call on May 7, 2024.

For the second quarter of 2024, LYFT expects gross bookings of $4.0-$4.1 billion, which implies year-over-year growth of 16-19%. The adjusted EBITDA is estimated to be in the range of $95-100 million, and the adjusted EBITDA margin (calculated as a percentage of gross bookings) is expected to be around 2.4%.

For 2024, Lyft continues to anticipate rides year-over-year growth in the mid-teens. Adjusted EBITDA margin (calculated as a percentage of gross bookings) is expected to be around 2.1%. Given its improved visibility into the first half of the year, Lyft now anticipates converting at least 70% of adjusted EBITDA to free cash flow for 2024.

LYFT, currently carrying a Zacks Rank #3 (Hold), reported first-quarter 2024 earnings per share of 15 cents, which beat the Zacks Consensus Estimate of 9 cents and improved year over year. Revenues of $1,277.2 million also outpaced the Zacks Consensus Estimate of $1,170.1 million and grew year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Let’s take a look at the first-quarter 2024 performances of other companies from the same industry.

Uber Technologies (UBER - Free Report) reported first-quarter 2024 loss of 32 cents per share, wider than the Zacks Consensus Estimate of 21 cents. In the year-ago reported quarter, UBER incurred a loss of 8 cents.

Total revenues of $10,131 million beat the Zacks Consensus Estimate of $10,076 million. The top line jumped 15% year over year.

Alphabet’s (GOOGL - Free Report) EPS of $1.89 beat the Zacks Consensus Estimate by 26.8%. The figure rose 61.5% year over year. Revenues of $80.54 billion increased 15% year over year (16% at constant currency).

Net revenues, excluding total traffic acquisition costs (the portion of revenues shared with Google’s partners and the amount paid to distribution partners and others who direct traffic to Google’s website), were $67.6 billion, which surpassed the consensus mark of $66.04 billion. The figure rose 16.4% on a year-over-year basis.

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