Lyft (LYFT) Down 40.1% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Lyft (NASDAQ:LYFT). Shares have lost about 40.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Lyft due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Lyft Beats on Revenues in Q4

Lyft incurred a loss (excluding 78 cents from non-recurring items) of 41 cents per share in fourth-quarter 2019, narrower than the Zacks Consensus Estimate of a loss of 57 cents. Results were aided by solid revenues that soared 51.9% on a year-over-year basis to $1,017.1 million, courtesy of robust growth in Active Riders and Revenue per Active Rider. The top line also surpassed the Zacks Consensus Estimate of $984.5 million. Notably, this was the fourth earnings report for Lyft since going public on Mar 29.

Active Riders (riders who take at least one ride during a quarter on Lyft’s multimodal platform through its app) in the quarter under review increased 23% year over year to 22.91 million. This San Francisco-based company’s Revenue per Active Rider also rose 23% to $44.4 million.

Adjusted EBITDA loss for the fourth quarter was $130.7 million compared with $251.1 million loss incurred a year ago. The adjusted EBITDA margin came in at -12.9% in the reported quarter compared with -37.5% in the fourth quarter of 2018.

Contribution improved 80% year over year to $549.5 million. Contribution margin expanded to 54% from 45.5% a year ago. Lyft exited the fourth quarter with unrestricted cash (cash and cash equivalents +short-term investments) of $2.85 billion compared with $2.04 billion at 2018 end.

Q120 Outlook

For the first quarter of 2020, the company anticipates revenues between $1,055 million and $1,060 million, indicating a year over year surge of 36-37%. The midpoint ($1.06 billion) of the guided range is marginally above the Zacks Consensus Estimate of $1.05 billion. Adjusted EBITDA loss is expected in the range of $140-$145 million.

2020 Outlook

For the current year, revenues are estimated in the $4,575-$4,650 million band, implying a rise of 27-29%. The midpoint ($4.61 billion) of this guided range is above the Zacks Consensus Estimate of $4.6 billion. Additionally, adjusted EBITDA loss is forecast in the bracket of $450-$490 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 11.9% due to these changes.

VGM Scores

Currently, Lyft has a strong Growth Score of A, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions indicates a downward shift. It comes with little surprise Lyft has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.