A month has gone by since the last earnings report for Lyft (LYFT Quick QuoteLYFT - Free Report) . Shares have added about 11.7% 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 catalysts.

Earnings Beat at Lyft in Q2

Lyft reported second-quarter 2024 earnings of 24 cents per share which beat the Zacks Consensus Estimate of 19 cents and improved year over year.

Revenues of $1.435 billion also outpaced the Zacks Consensus Estimate of $1.386 billion and improved 40.6% year over year, reflecting growth in the rideshare market. Active riders increased 10.2% year over year to 23.7 million.

Gross bookings reported for the quarter were $4.018 billion, marking a year-over-year increase of 17%.

Lyft’s adjusted EBITDA in the second quarter was $102.9 million, up more than 100% from the year-ago reported figure. The adjusted EBITDA margin (calculated as the percentage of gross bookings) was 2.6%, up 140 basis points.

Lyft exited the second quarter with cash and cash equivalents of $604.35 million compared with $507.91 million at the first-quarter end. Long-term debt, net of the current portion at the end of the reported quarter, was $578.33 million compared with $942.17 million at the prior-quarter end.

Guidance

For the third quarter of 2024, LYFT expects gross bookings of $4.0-$4.1 billion. The adjusted EBITDA is estimated to be $90-95million, and the adjusted EBITDA margin (calculated as a percentage of gross bookings) is expected to be around 2.3%.

For 2024, Lyft continues to anticipate rides growth in the mid-teens year over year. Adjusted EBITDA margin (calculated as a percentage of gross bookings) is expected to be around 2.1%.

Lyft remains on track to achieve positive free cash flow for the full year. Given its improved visibility into the first half of the year, Lyft now anticipates achieving more than 90% long-term conversion target of adjusted EBITDA to free cash flow for 2024, well ahead of schedule. This marks an improvement over the previous expectation of converting at least 70% of adjusted EBITDA to free cash flow for 2024. This improved outlook for 2024 free cash flow not only looks encouraging but also raises optimism about the stock.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -50% due to these changes.

VGM Scores

At this time, Lyft has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Lyft has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.