Last week, Lyft, Inc. (NASDAQ: LYFT) took its investors for a wild ride, unveiling its fourth-quarter earnings report. The report initially hinted at a remarkable 500 basis point margin expansion projected for 2024, igniting a frenzy that saw the share price soar by a staggering 60%. However, a swift clarification from CFO Erin Brewer during the earnings call revealed that the actual figure was a modest 50 basis point increase. The clarification of the typo sent the stock into a sudden descent, shedding nearly $2 billion in market capitalization.
CEO David Risher accepted responsibility for the error, describing it as ‘super frustrating’ for the entire team. Nonetheless, he remained steadfast in highlighting the impressive results of the quarter, resulting in the stock maintaining a remarkable 35% gain for the day, marking its most significant single-day increase since its IPO in 2019.
Lyft’s financial performance surpassed analyst expectations, with quarterly revenue hitting $1.22 billion and adjusted EPS standing at 18 cents. The company also anticipated stronger-than-anticipated bookings for the current quarter and projected positive free cash flow for the fiscal year 2024, building upon the $14.9 million in free cash flow generated in the fourth quarter of 2023.
While the journey was undoubtedly nerve-wracking and filled with unexpected twists for investors, Lyft’s overall trajectory showed promising signs of progress towards profitability, leaving investors with a sense of satisfaction amidst the turbulent ride.
Sources: Koyfin, Reuters
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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