Investors have been hopeful that the stock market could bounce back from its weakness in January, and so far, February has helped stocks get at least part of their groove back. Enthusiasm continued on Wednesday morning, as futures on the Nasdaq Composite (^IXIC -0.05%) index picked up 1.3% as of 8:30 a.m. ET.
Earnings continue to be a focus among market participants, and despite posting strong results, ride-hailing specialist Lyft (LYFT -0.66%) wasn't able to satisfy the high demands of its shareholders. However, another Nasdaq-listed stock did manage to post gains, potentially signaling better times ahead for a key industry. Let's look at both companies to see why they're on the move.
Shares of Lyft were down almost 4% in premarket trading on Wednesday morning. The company's ride-hailing business has been strong, but Lyft isn't giving its investors the level of certainty in its outlook to have top confidence going forward.
Lyft's fourth-quarter numbers looked strong. Fourth-quarter revenue soared 70% year over year to $970 million, closing a year in which Lyft's sales were up 36% from 2020 levels. Lyft reversed a year-ago loss with adjusted net income of $32.1 million for the quarter, helping to make the company profitable for the full year on an adjusted basis. Active rider counts were up by nearly half to 18.7 million, and revenue per active rider was up 14% to $51.79.
Yet investors didn't get everything they'd hoped to see. Even with the boost in ridership, numbers remained below their pre-pandemic levels. Moreover, with the omicron COVID-19 variant constraining usage in some of Lyft's most important markets, it's still unclear how far into 2022 shareholders will have to wait before Lyft will recover fully from the pandemic's impacts.
Lyft's results show how willing customers have been to get back to the old ways of doing things. That points to an eventual victory in Lyft's fight against the pandemic, but uncertainty about the exact timing could still hold back the stock in the near term.
Canopy's on the comeback trail
On their face, Canopy's financial numbers reflected continuing challenges. Revenue was down 8% from year-ago levels, although Canopy managed to boost its top line by 7% compared to where it was three months ago. Cannabis-related revenue plunged 20% year over year. Canopy also suffered a substantial loss of 115 million Canadian dollars during the quarter, but that was still significantly better than the CA$829 million loss from the year-earlier period.
However, investors like what they're seeing strategically from Canopy. The company retained its top market share in the Canadian premium flower market, and efforts to expand more broadly into edibles and beverages both in Canada and in the U.S. are paying off. A distribution deal with convenience store chain Circle-K helped make Canopy's launch of its CBD vape product Whisl a success.
Marijuana stocks have had a tough year, and even after today's gains, Canopy shares remain down about 80% from where they traded just 12 months ago. Investors are hopeful this report will mark a turning point for the cannabis company, but shareholders will have to wait and see whether the upward momentum continues.