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LYFT Stock Jumps 9.9% on Upbeat Q2 Earnings Results

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LYFT stock jumped 9.9% early Friday as investors cheered its impressive earnings results for the second quarter of 2022.

Ride-hailing company Lyft, Inc. (NASDAQ: LYFT) has posted impressive results for the second quarter of 2022. Shares of the company were up 9.9% in Friday’s pre-market trading session as investors looked impressed with the company’s upbeat results.

LYFT stock has grown about 25.1% ever since Uber Technologies, Inc. (UBER) posted robust second-quarter results on August 2.

A Snapshot of Lyft’s Earnings

  • Net earnings came in at 13 cents per share in the reported quarter, after adjusting for stock-based compensation and related costs versus analysts’ expectations of a loss of four cents.
  • Revenues jumped 30% year-over-year to $990.7 million in the second quarter of 2022, outpacing estimates of $990.5 million.
  • Lyft’s Contribution came in at $590.5 million for the reported quarter, up 31% over the year-ago period. Contribution margin of 59.6% outpaced guidance by 360 basis points.
  • Adjusted EBITDA of $79.1 million in the second quarter rose from $55.3 million in the year-ago period. The metric surpassed the guided range of $10-$20 million.
  • The company’s Active Riders surged 15.9% year-over-year to 19.86 million in the reported quarter. Revenue per Active Rider also jumped 11.8% year-over-year to $49.89 in the June quarter.

What Drove LYFT’s Upbeat Q2 Results?

One of the main reasons that drove LYFT’s upbeat Q2 results is that it has been witnessing improving demand for rides amid the easing of COVID-19 restrictions and robust consumer spending despite high inflation levels.

In fact, the company’s solid demand for rideshares came on the back of airport trips that met their historic high levels. Furthermore, managed Lyft business bookings, bike, and scooter rides more than doubled in the second quarter of 2022.

Commenting on the results, the Co-Founder and Chief Executive Officer of Lyft, Logan Green, said, “We generated the highest Adjusted EBITDA in our company’s history and saw COVID highs for Active Riders, drivers and rides. It’s clear consumer transportation is a good long-term business with a massive addressable market.”

LYFT Issues Q3 Outlook

The company expects third-quarter revenues in the range of $1.04 billion to $1.06 billion, up 20%-23% year-over-year. Adjusted EBITDA is estimated in the range of $55 million-$65 million in the third quarter. Contribution margin is projected to be nearly 55% in the third quarter of 2022.

What Is the Forecast for LYFT Stock?

On TipRanks, LYFT’s average price forecast is $26.71, which implies that the stock has upside potential of over 44% from current levels. Analysts have a Moderate Buy consensus rating on the stock, which is based on seven Buys and 10 Holds.

While analysts have mixed feeling about the stock, financial bloggers are 66% Bullish on LYFT. Retail investors are also Positive about the stock, as the number of portfolios with investments in LYFT has increased 2.5% in the last 30 days.

LYFT’s Prospects Look Promising

The easing of COVID-19 restrictions and robust consumer spending are creating a favorable business environment for LYFT. The San Francisco-based company has reprioritized its R&D initiatives, slowed recruiting, and curtailed some discretionary spending to focus on operational efficiency and profitability. With an upside potential of over 44%, investors can consider parking LYFT stock in their portfolio.

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