- LYFT stock gains over 30% on Wednesday following margin expansion snafu.
- Management said adjusted EBITDA would expand by 50, not 500, basis points in 2024.
- Earnings and revenue outpaced consensus for the fourth quarter.
- Net income losses greatly plunged from a year ago for the rideshare company.
Don’t let anyone tell you that mistakes can’t sometimes improve a situation. Lyft (LYFT) stock, the rideshare competitor to Uber (UBER), has benefited dramatically on Wednesday from a typo in its fourth-quarter earnings results.
At the time of writing on Wednesday, Lyft stock has accelerated by 34% to $16.25, while Uber stock has likewise jumped about 13% on the announcement that it will buy back up to $7 billion in stock.
Upon initially releasing its fourth-quarter earnings report late Tuesday, a statement from the company said that adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) would expand in 2024 by 500 basis points. LYFT stock rocketed afterhours on Tuesday, and at one point the spike climbed above 60%, before management corrected the sentence to say 50 basis points.
Lyft stock earnings news
Still, Lyft stock has gained more than 30% on Wednesday in the aftermath of the basis point flub, and it is hard to argue that initial euphoria regarding the typo did not play some part in Wednesday’s share price spike.
Of course, there was ample speculation that heavy shorting prior to the earnings release had led to a short squeeze, causing the shorts to repurchase stock in order to close out their positions. About 13% of the LYFT float was held short in the lead-up to earnings.
The fourth quarter results themselves were quite good though. Adjusted earnings per share (EPS) in the fourth quarter reached $0.16 per share — an 8-cent beat. GAAP EPS was $-0.06, which beat Wall Street consensus by 12 cents. The company’s net loss fell from $588 million in the previous year’s quarter to a loss of $26 million in Q4 2023.
Revenue rose 4% YoY to $1.22 billion, which narrowly beat Wall Street consensus by $3 million. But gross bookings hiked 17% from a year ago to $3.7 billion.
Q4 total rides rose 26% from a year prior to 191 million. Additionally, Lyft’s total number of rides in 2023 of 709 million rose 18% from 2022.
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Lyft stock forecast
Lyft stock reached a one-year high on Wednesday at $16.77. LYFT stock has not traded at that latitude since February 9, 2023. After traders took some profits off the table on Wednesday, LYFT stock has settled in after lunchtime just below the December 18 high of $15.95.
A close above that prior range high will hearten bulls to hold onto the stock, which could persaude the party to continue. However, a descent to support at the 50-day Simple Moving Average (SMA), which is currently trading near $13.50, would still amount to needed consolidation before a further leg up.
LYFT daily stock chart
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