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Buy Lyft Stock Heading into Earnings Tuesday as Uber IPO Looms?
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Shares of Lyft Inc. (LYFT - Free Report) have tumbled since the ride-sharing firm went public at the end of March. After some initial positivity, Lyft stock has failed to live up to some of the initial hype. With that said, it is still very early and the company is set to report its first-quarter 2019 financial results—its first as a public company—on Tuesday, May 7.
So, let’s see if investors should consider buying LYFT stock heading into earnings with its peer and main rival, Uber, expected to go public soon.
Quick Overview
Lyft was the first of a few major “unicorns”—private companies valued at $1 billion or more—to go public this year. The firm saw its stock price jump roughly 9% above its IPO price in its first day of trading. Since then, shares of the ride-sharing company have fallen over 20% to hover at around $62 per share. It is still early, but investors should note that LYFT’s early performance is one of the worst for a U.S.-based company that raised over $1 billion in its IPO since Facebook’s debut in 2012, according to Dealogic—but things have turned out well for FB.
Overall, Lyft is still a young company in a new and potentially booming industry. The company was founded in 2012 and currently faces one major problem: as its revenues climb, its losses grow. However, Wall Street will likely focus on its top-line expansion and the overall growth of its core business for now, and not earnings.
Still, Lyft stock might suffer from the recent strength of newly public Pinterest (PINS - Free Report) . On top of that, Wall Street and investors likely have their eyes on Lyft’s much-larger rival Uber, which is projected to go public in the second half of the week of May 6. Uber set its price target between $44 and $50 and hopes to raise between $8 billion to $10 billion in the IPO. It is also worth noting that PayPal (PYPL - Free Report) already announced that it will invest $500 million in Uber.
Q1 Outlook
Looking ahead, our current Zacks Consensus estimate calls for Lyft’s Q1 fiscal 2019 revenue to come in at $744.09 million. Meanwhile, the company’s second-quarter sales are set to reach $799.38 million. Peeking further ahead, the ride-sharing firm’s full-year 2019 revenues are projected to skyrocket 212.56% from the roughly $2.2 billion the firm reported in 2018 to reach $3.31 billion.
At the bottom end of the income statement, Lyft’s is projected to post an adjusted quarterly loss of $1.12 per share in the first quarter. The company is also expected to post a full-year 2019 loss of $4.46 a share.
Bottom Line
Lyft is currently a Zacks Rank #3 (Hold) that sports “F” grades for Value and Momentum in our Style Scores system. But as we touched on already, Wall Street will likely focus on top-line growth and customer acquisition for now.
Nonetheless, it seems like it might be a good idea to wait to see how Wall Street reacts to the firm’s first big test as a public company. Not to mention, it is likely prudent for investors to see a more complete breakdown of the company’s financial picture and growth expectations.
Lyft is scheduled to release its first-quarter 2019 financial results after the closing bell on Tuesday, May 7. Make sure to come back to Zacks for a full round-up of the company’s actual results.
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Buy Lyft Stock Heading into Earnings Tuesday as Uber IPO Looms?
Shares of Lyft Inc. (LYFT - Free Report) have tumbled since the ride-sharing firm went public at the end of March. After some initial positivity, Lyft stock has failed to live up to some of the initial hype. With that said, it is still very early and the company is set to report its first-quarter 2019 financial results—its first as a public company—on Tuesday, May 7.
So, let’s see if investors should consider buying LYFT stock heading into earnings with its peer and main rival, Uber, expected to go public soon.
Quick Overview
Lyft was the first of a few major “unicorns”—private companies valued at $1 billion or more—to go public this year. The firm saw its stock price jump roughly 9% above its IPO price in its first day of trading. Since then, shares of the ride-sharing company have fallen over 20% to hover at around $62 per share. It is still early, but investors should note that LYFT’s early performance is one of the worst for a U.S.-based company that raised over $1 billion in its IPO since Facebook’s debut in 2012, according to Dealogic—but things have turned out well for FB.
Overall, Lyft is still a young company in a new and potentially booming industry. The company was founded in 2012 and currently faces one major problem: as its revenues climb, its losses grow. However, Wall Street will likely focus on its top-line expansion and the overall growth of its core business for now, and not earnings.
Still, Lyft stock might suffer from the recent strength of newly public Pinterest (PINS - Free Report) . On top of that, Wall Street and investors likely have their eyes on Lyft’s much-larger rival Uber, which is projected to go public in the second half of the week of May 6. Uber set its price target between $44 and $50 and hopes to raise between $8 billion to $10 billion in the IPO. It is also worth noting that PayPal (PYPL - Free Report) already announced that it will invest $500 million in Uber.
Q1 Outlook
Looking ahead, our current Zacks Consensus estimate calls for Lyft’s Q1 fiscal 2019 revenue to come in at $744.09 million. Meanwhile, the company’s second-quarter sales are set to reach $799.38 million. Peeking further ahead, the ride-sharing firm’s full-year 2019 revenues are projected to skyrocket 212.56% from the roughly $2.2 billion the firm reported in 2018 to reach $3.31 billion.
At the bottom end of the income statement, Lyft’s is projected to post an adjusted quarterly loss of $1.12 per share in the first quarter. The company is also expected to post a full-year 2019 loss of $4.46 a share.
Bottom Line
Lyft is currently a Zacks Rank #3 (Hold) that sports “F” grades for Value and Momentum in our Style Scores system. But as we touched on already, Wall Street will likely focus on top-line growth and customer acquisition for now.
Nonetheless, it seems like it might be a good idea to wait to see how Wall Street reacts to the firm’s first big test as a public company. Not to mention, it is likely prudent for investors to see a more complete breakdown of the company’s financial picture and growth expectations.
Lyft is scheduled to release its first-quarter 2019 financial results after the closing bell on Tuesday, May 7. Make sure to come back to Zacks for a full round-up of the company’s actual results.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.
This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.
See their latest picks free >>