Lyft Q3 Earnings Preview: Will Earnings Drive the Stock Higher?
Active-rider growth is in focus for investors. Can Lyft beat expectations? What can traders and investors expect?
- Lyft Q3 earnings are due Wednesday, Nov. 8.
- EPS are expected to be $0.15, adjusted, on $1.14 billion in revenue.
- Lyft's stock price gains more than 8% on Thursday.
Lyft Inc. (LYFT) is scheduled to report third quarter fiscal results on Wednesday, Nov. 8, after market close, according to press release. A conference call is scheduled to follow at 4 p.m. Central Time.
Investors expect to see earnings per share (EPS) of $0.15 on an adjusted basis, while the GAAP figure is expected to cross the wires at -$0.19 on $1.14 billion in revenue. Investors have increased their view on adjusted EPS, rising nearly 16% over the past four weeks. Hitting the mark could be key for investors, who appear less forgiving, given the current market environment.
Growth in riders will be important for Lyft investors
Active-rider growth is in focus this quarter after the company lowered prices to compete with Uber, which has taken market share away from Lyft in recent quarters. Revenue per rider is also in the spotlight although the number may not impress, given the price cuts.
The company is also expected to announce further cost-cutting measures as the threat of higher interest rates puts pressure on its business segment. Still, consumer health has remained rather resilient in the U.S. economy, and it could offer a bright spot in the view of executives’ guidance.
The company may accomplish cost-cutting measures through further divestment in its micro-mobility business, which includes bike and electronic scooter rentals in major cities. According to analysts, Lyft currently holds six buy ratings, 35 hold ratings and two sell ratings, with an average target price of $11.75, according to Bloomberg data.
On Thursday, the New York attorney general announced a settlement granting a total of $328 million in back pay for rideshare drivers working with Lyft and its rival Uber Technologies (UBER). The settlement also establishes a minimum floor for driver pay and guaranteed sick leave. Still, the share price rose significantly, considering the announcement.
Trading Lyft earnings
Lyft is trading with an implied volatility rank (IVR) of 43.1 on Thursday. The Nov. 10 expiry shows an expected move of +/- 1.33 points against the current stock price of $9.91 per share.
The stock price has traded in a shallow downward trend since July, making a series of lower highs and lower lows. Thursday’s bounce comes from the lowest trading level since May, suggesting a bottom may have been put in. Still, the stock remains below its 26-day exponential moving average (EMA).
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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