Lyft (LYFT) Up 13.5% Since Last Earnings Report: Can It Continue?

It has been about a month since the last earnings report for Lyft (LYFT). Shares have added about 13.5% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Lyft due for a pullback? 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 Q1

Lyft incurred a loss of 32 cents per share (excluding 99 cents from non-recurring items), narrower than the Zacks Consensus Estimate of a loss of 56 cents. Results were aided by solid revenue growth of 23% on a year-over-year basis to $955.7 million, courtesy of a rise in Active Riders and Revenue per Active Rider. The top line also surpassed the Zacks Consensus Estimate of $864.4 million.

Active Riders (riders who take at least one ride during a quarter on Lyft’s multimodal platform through its app) increased 3% year over year to 21.21 million in the quarter under review. This San Francisco-based company’s Revenue per Active Rider climbed 19% to $45.06 million. Given the substantial impact of the coronavirus outbreak, the numbers are quite impressive. After a 75% decline in ride-share trips in April, the company is starting to see signs of recovery with relaxation in social distancing norms in the United States. Notably, ride volumes rose 21% in the first week of May.

Coming back to the earnings performance, adjusted EBITDA loss for the first quarter was $85.2 million compared with $216-million loss incurred a year ago. The adjusted EBITDA margin came in at 8.9% compared with -27.8% in the first quarter of 2019.Total costs and expenses contracted 29.1% year over year to $1.37 billion in the quarter.

Contribution improved 42.2% year over year to $547.4 million. Contribution margin expanded to 57.3% from 49.6% a year ago. Lyft exited the first quarter with unrestricted cash (cash and cash equivalents +short-term investments) of $2.67 billion compared with $2.85 at the end of 2019.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -12.27% due to these changes.

VGM Scores

Currently, Lyft has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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 broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Lyft has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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