LYFT Inc (LYFT)

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3 Trades On Lyft (LYFT) Stock Ahead Of The Ride-Hailing Platform’s Q4 Earnings Report
By: Investing.com | January 31, 2022

• Ride-hailing company LYFT stock declined over 16% in January.
• As Lyft reports Q4 earnings on Feb. 8, shares are likely to be choppy.
• Long-term investors could consider investing around current levels.

Shares of the ride-sharing platform Lyft (NASDAQ:LYFT) have declined 16.3% since the start of 2022. In comparison, its biggest rival Uber (NYSE:UBER) is down 16.0%. At the same time, the Dow Jones Transportation Average dropped 8.7% in January.


LYFT Weekly

What a difference a year has made in share prices of some of these former Wall Street darlings. On Mar. 18, 2021, LYFT stock pushed past $68 and hit a record high.

More recently, however, on Jan. 28, 2022, the stock saw a 52-week low just shy of $34, and closed the week at $35.75. The 52-week range has been $33.94 - $68.28, while the market capitalization (cap) of Lyft stands at $12.2 billion.

In the US, Lyft and Uber dominate the ride-hailing market with market shares of about 30% and 70%, respectively. Both companies came under significant pressure in 2020, especially in the early months of the pandemic when lockdowns were in effect.

As the vaccination rollout picked up steam in 2021 they both reported increasing levels of revenue. Yet long-term investors have been hesitant to keep these two stocks in their portfolios. As a result, LYFT lost almost 20% in the past 12 months and UBER stock declined over 30%.

Now investors are wondering what might be next for both names. Today’s article takes a closer look at Lyft shares.

Lyft’s Q3 Results

Lyft released Q3 financials on Nov. 2. Revenue of $864.4 million increased 73% year-over-year (YOY). A year ago, it had been $499.7 million in Q3 2020, an increase of 73% YOY.

The ride-hailing heavyweight had over 18.9 million active riders during the quarter, up from 12.5 million a year ago. Meanwhile, revenue per active rider reached $45.63. In Q3 2020, it had been $39.94.

Adjusted EBITDA for the quarter was $67.3 million, marking the company’s second consecutive profitable quarterly adjusted EBITDA. Finally, adjusted net income was $17.8 million. A year ago, it had been -$280.4 million.

On the results, (now former) CFO Brian Roberts cited: “In Q3 we achieved record Revenue Per Active Rider as ride frequency increased. We also hit a new all-time high Contribution Margin…”

Lyft will report Q4 results on Tuesday, Feb. 8 after market close. Management expects Q4 revenue will be in the $930-$940 million band and its adjusted EBITDA to be between $70 and $75 million.

Prior to the release of Q3 results, Lyft stock was around $45. A week later, by Nov. 10, it went over $57, and hit a multi-month high. But that price is now in the rearview mirror as LYFT shares currently change hands at $35.75.

What To Expect From Lyft Shares

Among 43 analysts polled via Investing.com, LYFT stock has an “outperform" rating.


LYFT Consensus Estimates

Chart: Investing.com

Analysts also have a 12-month median price target of $68.47 for the stock, implying an increase of about 91% from current levels. The 12-month price range currently stands between $38 and $95.

On the other hand, according to a number of valuation models, like those that might consider P/E or P/S multiples or terminal values, the average fair value for LYFT stock via InvestingPro is $41.35.


LYFT Fair Value

Source: InvestingPro

In other words, fundamental valuation suggests shares could only increase around 15.5%.

We can also look at Lyft’s financial health as determined by ranking more than 100 factors against peers in the industrials sector...

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