Lyft (LYFT) Surges 12% After Revenue and Loss Per Share Beat, Firms Raise PTs Ahead of Likely Covid Recovery

Shares of Lyft (NASDAQ: LYFT) are up 11.7% in pre-open trading Wednesday after the ride-hailing company reported higher-than-expected revenue results for its fourth quarter.

Lyft reported it lost $0.58 per share, which is better than the $0.72 expected from the market analysts. This was possible as the company generated $570 million in revenues while the Street expected $563 million.

“Despite the difficult backdrop in 2020, we continued to focus on improving our business for the long-term,” said Logan Green, co-founder and chief executive officer of Lyft.

“The progress we’ve made has been significant and I believe we are now in a stronger position than at any time in our past. Even as we’ve strengthened our financial position, we’ve continued to fund strategic investments that build on our core competencies and on our marketplace flywheel, to lower costs and deliver more value to drivers, riders and partners.”

LYFT’s Active riders number was now reported at 12.55 million, higher than 12.51 million in the prior quarter but missing on the 13.2 million expected by analysts.

Still, the ride-hailing company recorded a revenue per active rider of $45.40 while the market surveyed market analysts expected $42.20.

Cowen analyst John Blackledge raised the price target on LYFT to $72.00 per share from the prior $56.00 as he expects the business to continue recovering from the pandemic.

“LYFT 4Q results were slightly ahead on rev / EBITDA, with Lyft delivering on profitability, as mgmt. noted positive EBITDA could arrive by 3Q21 amid a macro recovery. Margin upside is predicated on improvement in core biz, which mgmt. expects as we head through '21. Mgmt. also cited progress in implementing Prop 22-related benefits,” the analyst wrote in a note.

Wedbush analyst Dan Ives sees the latest results from Lyft as evidence that the recovery story is playing out paving the way for a PT hike to $72.00 from $53.00.

“Last night LYFT delivered better than expected 4Q results which were another major step in the right direction on the recovery road. With a quicker trajectory to profitability on the horizon and the Street craving for "reopening plays", Lyft now finds itself seeing a snapback in ridesharing momentum into the rest of 2021 after navigating some dark days (along with its ridesharing brethren Uber) over the past year with the Prop 22 nightmare also in the rear view mirror,” Ives said in today’s note.

“We remained positive during the depths of the pandemic with the view that Lyft was taking appropriate steps to come out of the pandemic in a materially better position than it was going into it. And while demand remains challenged as the Covid environment remains elevated, the overall path to profitability is leaps and bounds ahead of where it was a year ago, which should set Lyft up to see material leverage and scale as the environment improves, whether that is in 2H21 or in 2022. When it does come it should have outsized impacts to profitability.”

Both Ives and Blackledge have an “Outperform” rating placed on the LYFT stock.

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