Lyft Pre-market Trade: Shares Surge 16%, Despite Forecast Error

Lyft shares saw a 16% surge in premarket trade this Wednesday, maintaining some of the gains despite the company’s acknowledgment of a significant error in its press release detailing its recent results.

The initial release indicated a forecast of a 500 basis point, or 5%, increase in its adjusted earnings margin for 2024.

However, the company later clarified that the accurate figure should have been 50 basis points or 0.5%.

Lyft shares
Analysts raised Lyft’s target price, citing fourth-quarter revenue surpassing estimates and strong guidance for EBITDA. (Credits: Google Finace)

During the firm’s earnings call on Tuesday, Chief Financial Officer Erin Brewer announced the “correction.”

Following the report, Lyft stock initially surged over 60% higher in extended trade, only to moderate significantly upon the correction.

The company’s full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) underwent a notable turnaround, shifting from a $416.5 million loss to a $222.4 million profit.

Lyft
Full-year EBITDA shifted from $416.5M loss to $222.4M profit, indicating significant improvement. (Credits: Getty Images)

According to analysts at TD Cowen, Lyft’s fourth-quarter revenue surpassed estimates, propelled by robust gross bookings. Additionally, both EBITDA and EBITDA guidance exceeded expectations, prompting them to raise their target price for the stock.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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