Lyft stock soared Thursday after the ride-hailing firm reported better-than-expected sales for the third quarter, with earnings that met consensus estimates. The ride-hailing company also raised its profit outlook for the year.
Lyft said that it lost 3 cents per share on sales of $1.52 billion for the September-ended quarter. Analysts polled by FactSet projected the San Francisco-based company would lose 3 cents per share per share on sales of $1.44 billion.
For the same period a year earlier, Lyft posted adjusted earnings of 24 cents per share on sales of $1.16 billion.
Meanwhile, Lyft's bookings grew 16% to $4.1 billion. Analysts were looking for bookings of $4.08 billion for the quarter, according to FactSet.
On the stock market today, Lyft stock gained 22.9% to close at 17.70. Shares overtook Lyft's long-term 200-day moving average. Coming into the report, Lyft stock had lost 4% year to date.
Lyft Raises Outlook
For the current quarter, Lyft guided for bookings of $4.32 billion, at the midpoint of its range. Prior to the company posting its results, analysts were projecting Lyft would tally $4.23 billion in bookings for the December-ending quarter, according to FactSet.
For the full year, Lyft said it still expects year-over-year ride growth in the midteens. But Lyft revised its estimates for adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) margins to 2.3%, up from 2.1% in the company's previous outlook.
"Our team delivered one of the strongest quarters in Lyft history, following the many new innovations we've brought to drivers and riders so far this year," Chief Executive David Risher said in a news release.
Active riders for Lyft grew 9% year over year to 24.4 million in the third quarter, while total rides grew 16% to 217 million.
Analysts Raise Targets
Following the report, Piper Sandler analyst Thomas Champion reiterated an outperform rating for Lyft. He noted that Lyft followed a "weaker Q2 report with strong results" for the third quarter. He upped his price target for Lyft stock to 23, from 17.
"Execution is impressive, valuation looks reasonable, and we'd be buying the move after-hours," Champion wrote Wednesday. "Favorable supply dynamics in the industry continue and Lyft product improvements are driving pricing lower (and volumes higher)."
Evercore ISI analyst Mark Mahaney says the Q3 results implied positive momentum for Lyft. But he maintained a neutral rating.
"The key question for Lyft remains the company's ability to sustain top-line growth while ramping profitability," Mahaney wrote to clients. "While we see Lyft's valuation as reasonable, we would like to see positive fundamental trends sustained over time to become constructive on shares."
Analysts will be watching the success of a new partnership between Lyft and DoorDash. As announced last week, subscribers to DoorDash's $9.99-per-month DashPass membership will be eligible for discounted rides through Lyft.
"DashPass has millions of subscribers, and with last week's partnership announcement, we're giving every one of them a reason to prefer Lyft," Risher told analysts on a conference call Wednesday.
Lyft Stock: Technical Ratings
Prior to earnings, Lyft gained 4% in regular Wednesday trading. Early Wednesday, Lyft announced a series of new partnerships with autonomous vehicle developers, including Mobileye. How Lyft will either collaborate with or compete against autonomous vehicle providers has been a point of concern for investors.
Risher told analysts Wednesday that the partnerships are "just the beginning."
"We envision a robust future that brings together human drivers and autonomous vehicles in an always-on transportation network," the Lyft chief executive said.
Coming into the report, Lyft had an IBD Composite Rating of 85 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating. The best growth stocks have a Composite Rating of 90 or better.
Further, Lyft's IBD Relative Strength Rating was 67 out of a best-possible 99. The RS Rating means that Lyft has outperformed 67% of all stocks in IBD's database over the past year.
