Shares of Lyft (LYFT 1.87%) were moving higher for the second session in a row today as investors continued to respond to better-than-expected results from the ride-sharing company. It also received another round of price-target hikes from Wall Street.
As of 1:35 p.m. ET, the stock was up 16.3% after gaining 35% yesterday.
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Is Lyft finally turning it around?
Several Wall Street analysts raised their price targets on Lyft this morning, commenting on the improved competitive dynamics in the industry. This has helped Uber stock soar over the last year, as well. Lyft showed off 17% bookings growth to $3.7 billion, while revenue rose 4% to $1.2 billion, which was slightly below the consensus of $1.22 billion.
However, investors were more focused on the bottom line where the company's cost-cutting paid off. Lyft reported an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) profit of $66.6 million, which compared to a loss of $248.3 million in the quarter a year ago. It also reported adjusted earnings per share (EPS) of $0.18, which was well ahead of the consensus for $0.08.
The results, along with an improvement by Uber, show the ride-hailing industry is stabilizing, as both competitors cut back on spending and incentives to drive profitability.
Can Lyft keep moving higher?
Lyft's guidance also pleased the market. The company expects adjusted EBITDA of $50 million-$55 million for the first quarter. For the full year, it expects gross booking growth in the mid-teens or slightly higher. Management also said 2024 would be its first year with positive free cash flow.
Lyft is still losing money on a generally accepted accounting principles (GAAP) basis. If it maintains its revenue growth and profitability improves, however, the stock could have a lot of room to run higher.
