Lyft (NASDAQ:LYFT) was hampered by operational disruptions for several months due to the COVID-19 lockdowns and travel restrictions imposed last year. However, as pandemic data improves and restrictions ease, LYFT should benefit from recovering rideshare demand. But given the stock’s high volatility, is it an ideal addition to one’s portfolio now? Read on. Multimodal transportation networks-operator Lyft, Inc. (LYFT), which is headquartered in San Francisco, is the second-largest ride-sharing service provider in the United States and offers various transportation options through the company’s mobile-based applications. The company faced several operational disruptions during the lockdown phase of the COVID-19 pandemic due to reduced demand. However, with rising vaccination rates and easing travel restrictions, rideshare demand is rebounding, which should benefit the company.
LYFT’s shares have soared in price since the company reported better than expected third-quarter earnings and outlined a path to sustained profitability on the back of drastic cost cuts and a return of riders and drivers. The company reported an 11% increase in active riders for the quarter ended September 30, but ridership remained 35% below peak levels registered before the pandemic. LYFT’s revenues increased 73% year-over-year to $864.4 million in its fiscal third quarter, ended September 30. Its adjusted net income was $17.8 million, representing a 106.3% increase versus the prior-year quarter. Furthermore, the company’s EPS surpassed the Street’s EPS estimate by 266.7%. "We're seeing the right things happening in the market and will begin to taper incentives in the quarter ahead," said LYFT President John Zimmer.
However, considering that full-fledged business travel to offices has not yet resumed due to the continuation of remote working, and that many consumers are reluctant to travel with unvaccinated children, it could take a while before the company operates at its pre-pandemic capacity.