Lyft Inc. shares climbed more than 4% in Wednesday’s pre-market trading session after the ride-hailing company recorded its best week in terms of ride volume since the outbreak of the coronavirus pandemic.
Specifically, Lyft (LYFT) reported that rideshare volume in the week ending Feb. 28 reached a record for 2021 and was the company’s best week since March 2020. Average daily ride volume in February rose 4% month-over-month compared to average daily rides volume in January.
As a result, Lyft now expects first quarter ride volume to decline 1.2% quarter-on-quarter, an improvement from the 4% drop forecasted previously. Going forward, the ride-hailing company sees signs of a recovery as ride volume is projected to show positive year-on-year growth beginning the week ending March 21.
“This growth trend is expected to continue through the duration of 2021 barring a significant worsening of COVID-19 conditions,” Lyft stated in an SEC filing.
In terms of guidance, Lyft revised its outlook and now forecasted an adjusted EBITDA loss of $135 million for the first quarter of 2021 versus the prior outlook of a loss of between $145 and $150 million. The improved guidance is due to lower operating expenses and to contribution margin, which is expected to be at the top end of the previously provided range, the company said.
Lyft plans to release financial results for the first quarter ended March 31 in early May.
Shares in Lyft have surged 32% so far this year, while Wall Street analysts have a bullish outlook on the stock with a Strong Buy consensus rating. That’s based on 23 Buy ratings versus 7 Hold ratings. What’s more, the average analyst price target of $67.85 implies 19% upside potential in the coming 12 months.
Tigress Financial analyst Ivan Feinseth last month reiterated a Buy rating on the stock, citing “better cost management and a vaccine-driven recovery,” which he argues will move the company closer to profitability this year.
“LYFT is a significant beneficiary of the COVID-19 vaccine as the rollout will continue to drive increasing rideshare mile demand, which will drive a revenue recovery,” Feinseth wrote in a note to investors. “LYFT will continue to benefit from the macro trends of the ongoing consumer adoption of transportation as a Service (TaaS), expand partnerships, and offer increasingly innovative services.” (See Lyft stock analysis on TipRanks).
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