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Lyft (LYFT) to Report Q4 Earnings: What's in the Offing?

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Lyft LYFT, which went public on Mar 29, is scheduled to report fourth-quarter 2019 results on Feb 11, after the market closes.

The Zacks Consensus Estimate for the December quarter is currently pegged at a loss of 57 cents, indicating an improvement from the consensus mark of a loss of 65 cents 60 days ago. Given this backdrop, let’s delve into the factors that might have impacted the company’s performance in the said period.

Akin to the last few quarters, significant growth in Active Riders (riders who take at least one ride during a quarter on Lyft’s multimodal platform through its app) is anticipated to have boosted the company’s top line in the fourth quarter. Notably the Zacks Consensus Estimate for Active Riders suggests a 2.1% rise from the third quarter 2019 reported figure. Backed by Active Rider growth, the company expects fourth-quarter revenues to have been between $975 million and $985 million, implying a rise from $955.6 million reported in the previous quarter.

However, seasonal softness during the fourth quarter is likely to have affected Lyft’s performance. Additionally, certain sales and marketing investments were pushed into the fourth quarter from the third. Therefore, increased operating expenses might reflect on the company’s bottom-line. Notably, management expects adjusted EBITDA loss to have been in the range of $160-$170 million for the soon-to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively predict a beat for Lyft this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. However, that is not the case here as highlighted below.

Earnings ESP: Lyft has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 57 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Lyft carries a Zacks Rank #2 but the 0.00% ESP makes surprise prediction difficult.

Highlights of Q3 Earnings

In the last reported quarter, the company delivered a positive earnings surprise of 42.3% with narrower-than-expected loss. Revenues also surpassed the Zacks Consensus Estimate and soared 63.4% year over year as well. Results were aided by 28% increase in Active Riders.

Stocks to Consider

Investors interested in the broader Computer and Technology sector may consider Avalara, Inc. AVLR, Arista Networks, Inc. ANET and Altice USA, Inc. (ATUS - Free Report) as these stocks possess the perfect mix of elements to beat on earnings in the next releases.

Avalara has an Earnings ESP of +30.77% and a Zacks Rank #3. The company will report fourth-quarter 2019 earnings numbers on Feb 12. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks has an Earnings ESP of +2.72% and a Zacks Rank of 3. The company will release fourth-quarter financial numbers on Feb 13.

Altice is also a Zacks #3 Ranked company and has an earnings ESP of +11.11%. The company will announce fourth-quarter results on Feb 12.

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