Lyft (LYFT 3.88%) shareholders beat the market this week as the stock gained as much as 15% through trading on Thursday before settling to a 12% increase, according to data provided by S&P Global Market Intelligence. That boost easily outpaced the 0.1% uptick in the S&P 500.
The rally put the ridesharing giant back ahead of the market so far in 2022 and was powered by a warm Wall Street reception to its latest earnings report.
Sales through late December soared 70% to $970 million, Lyft said on Tuesday, as the company recovered from the pandemic slump. Revenue was still down compared to the pre-pandemic period in 2019, though.
Lyft also reported another net loss, yet management stressed the fact that losses are narrowing, falling to $259 million from $458 million a year ago. "We strengthened our financial position and continued investing in exciting growth initiatives," CEO Logan Green said in a press release. Losses landed at $1 billion for the full fiscal year compared to $1.8 billion in 2020.
Lyft's optimistic outlook was a key factor pushing the stock higher this week. While management is seeing lingering pressure on rider volumes due to the omicron variant, rideshare volumes should only drop slightly this quarter, compared to the end of 2021. As a result, Lyft should book revenue of between $800 million and $850 million to start 2022, translating into year-over-year growth of around 35%.
Management says it is "cautiously optimistic" that it can accelerate sales growth beyond this past year's 26% increase as the pandemic threat wanes. There is a good level of driver availability, executives explained in a conference call. And rider volumes still have room to recover since they're sitting about 30% below 2019 levels.
Meanwhile, watch for cost cuts to continue boosting the bottom line, perhaps putting Lyft in position to log its first year of net profit by fiscal 2023.