Lyft's Stock Soars On Stellar Q4 Results: Analysts Range From Cautious To Optimistic

Shares of Lyft Inc LYFT climbed in early trading on Wednesday, after the company reported upbeat results for the fourth quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

Truist Securities On Lyft

Analyst Youssef Squali maintained a Hold rating, while raising the price target from $13 to $15.

“Lyft's strategy early last year to lean in on pricing, on the customer experience and on product improvements as competitive differentiators bore fruit in 4Q23, with results showing accelerating growth in rides & rides' frequency,” Squali wrote in a note.

“A healthier marketplace and sustained momentum QTD bodes well for 1Q, driving higher than expected guidance, while directional 2024 commentary reflects a better growth outlook,” he added.

Piper Sandler On Lyft

Analyst Alexander Potter reiterated an Overweight rating, while lifting the price target from $14 to $17.

Lyft reported gross bookings of $3.72 billion for the fourth quarter, exceeding its guidance of $3.6 billion to $3.7 billion, Potter said. The performance of the stock in after-hours trading was “most likely” due to the company’s better-than-expected guidance for gross bookings in 2024, “as well as expectations for higher margins and positive FCF,” the analyst stated. “EBITDA margin as a % of GB is expected to expand 50 bps, to 2.1% in 2024,” he added.

Wedbush On Lyft

Analyst Scott Devitt reaffirmed a Neutral rating, while raising the price target from $14 to $15.

Lyft reported healthy fourth-quarter results, “with total bookings 1.4% above expectations and adj. EBITDA ~$11mm ahead of consensus,” Devitt said. “Importantly, management expects 2024 rides to grow mid-teens Y/Y and gross bookings to grow slightly faster driven by modest growth in bookings per ride,” he added.

“We are encouraged by the improving intermediate-term growth trajectory of the business and are raising our bookings and revenue estimates to reflect rising trip frequency and modest growth in bookings per ride this year,” the analyst further wrote.

Check out other analyst stock ratings.

RBC Capital Markets On Lyft

Analyst Scott Devitt reiterated a Sector Perform rating, while lifting the price target from $15 to $17.

Lyft’s fourth-quarter report indicated that the company “is competing on a more stable footing competition wise and is maintaining control of its expense drivers like incentives & insurance costs,” Devitt said.

He added that Lyft is now competing “much more adequately” with Uber Technologies Inc UBER. “A strong outlook and visibility to margin expansion drive our estimates higher,” the analyst stated.

JPMorgan On Lyft

Analyst Doug Anmuth reaffirmed a Neutral rating, while raising the price target from $11 to $13.

“Lyft reported healthy 4Q results w/rides, bookings, and EBITDA all ahead of expectations as marketplace health continues to improve on supply tailwinds, coupled with the company’s cost discipline & customer obsession (both on the rider & driver side),” Anmuth wrote in a note.

“LYFT expects 2024 to be a positive FCF year w/~50% conversion from EBITDA dollars as capex moderates & insurance accruals/payments stabilize,” he added.

BMO Capital Markets On Lyft

Analyst Brian Pitz maintained a Market Outperform rating and price target of $15.

Higher-than-expected rider frequency drive an acceleration in total Rides growth to 26%, from 20% in the previous quarter, Pitz said. He added that the “durability” of this growth remains unclear, as Lyft is a “pure play rideshare business with limited cross-sell capabilities.”

The analyst further stated that insurance costs “continue to be a risk.”

Needham On Lyft

Analyst Bernie McTernan reiterated a Hold rating on the stock.

“LYFT exited '23 with a strong trajectory for growth, exiting the year at the high watermark for bookings and rides growth” McTernan wrote.

“We think the price cuts and other product led initiatives by LYFT are leading to a healthier marketplace including rising engagement with rides per active rider up +15% in 4Q and driver hours growing +47% YoY,” he added.

LYFT Price Action: Shares of Lyft had risen by 29.6% to $15.73 at the time of publication Wednesday.

Now Read: Microsoft Detects Russian, Chinese AI Hackers: Is It Time To Add Cybersecurity To Your Portfolio?

Photo: Shutterstock