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Why Lyft Stock Leapt Today

By Joe Tenebruso – Nov 3, 2021 at 4:18PM

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The ride-hailing industry is recovering as the economy reopens.

What happened

Shares of Lyft (LYFT -0.97%) jumped on Wednesday after the ridesharing company delivered solid third-quarter results. 

As of 3:45 p.m. EDT, Lyft's stock price was up more than 8%.

So what

Lyft's revenue soared 73% year over year to $864.4 million, as more drivers returned to work. "Driver supply materially improved in Q3, up nearly 45% versus last year, reflecting strong new driver trends," CEO Logan Green said in a press release.

Moreover, demand for rides is recovering as vaccinations increase and COVID-19 case counts moderate. Lyft's active riders surged 51.4% to 18.9 million.

Better still, people are calling for rides more often. Lyft's revenue per active rider increased 14.2% to a record $45.63 in the quarter.

A person is hailing a driver.

Image source: Getty images.

These revenue gains combined with cost cuts helped Lyft narrow its losses to $71.5 million, compared to a net loss of $459.5 million in the year-ago quarter. The ride-hailing service also generated positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $67.3 million, signifying notable progress toward management's goal of achieving full-year adjusted EBITDA profitability in 2021. 

Now what

Lyft expects to produce revenue of $930 million to $940 million in the fourth quarter, representing year-over-year growth of 63% to 65%. Management also guided for adjusted EBITDA of $70 million to $75 million.

During a conference call with analysts, chief financial officer Brian Roberts said that Lyft will emerge from the pandemic a stronger and more profitable company with enviable long-term growth prospects. "We plan on building a significantly larger business as we attack the massive market opportunity ahead of us," Roberts said. 

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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