Lyft soars (briefly) after accidentally misstating forward revenues by, err, 10 times

Lyft’s stock surged over 15% in extended trading as the ride-sharing company projected achieving positive free cash flow for the year. However, enthusiasm waned after Lyft disclosed an error in its press release, injecting drama.

During after-hours trading on Tuesday, the stock briefly soared by more than 60% to just over $20, marking its highest level since August 2022. However, it later stabilized to a gain of about 15%.

This occurred despite a notable mistake: Lyft erroneously stated in a press release that a key margin metric was expected to increase by 500 basis points this year. Chief Financial Officer Erin Brewer corrected this forecast during a subsequent conference call, indicating an increase of 5 basis points instead.

Lyft’s after-hours activity saw approximately 47.8 million shares traded, exceeding its average daily volume of about 13.6 million shares over the past 50 regular trading sessions.

According to its latest earnings report, Lyft’s gross bookings surged by 17% to $3.7 billion in the quarter compared to the previous year. It reported adjusted earnings of 18 cents per share, surpassing analysts’ forecast of 8 cents per share. Additionally, its revenue of $1.2 billion met analyst expectations, while net losses narrowed to $26.3 million.

Looking ahead, Lyft forecasted gross bookings in the range of $3.5 billion to $3.6 billion for the first quarter of 2024, along with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $50 million and $55 million. Moreover, Lyft expressed its expectation of achieving positive free cash flow for the entire year of 2024.

“With pricing competitively aligned post the early-2023 cuts, LYFT has been able to stabilize share, expand the rider base, grow frequency, and accelerate rides growth throughout 2023,” noted Jake Fuller, Equity Analyst at BTIG. “Highlights: 1) LYFT topped 4Q guide, and the 1Q outlook was above consensus, with both mainly a function of strong rides growth; 2) The main driver of that acceleration has been rising frequency with rides/rider +15% in 4Q and +9% for the year; 3) We bring 2024 estimates up as we factor in that greater frequency, bringing our rides growth mid-teens and yielding increased confidence in LYFT’s ability to deliver >$300M of EBITDA for the year.”