When Lyft released its earnings for the quarter, the initial reaction from investors was one of excitement. The company’s stock soared by more than 60%, causing a major buzz in the market. However, the excitement quickly turned to disappointment as Lyft’s Chief Financial Officer, Erin Brewer, revealed a major error in the press release.

Lyft’s earnings per share came in at 18 cents adjusted, beating the expected 8 cents. However, revenue met expectations at $1.22 billion. This achievement was overshadowed by Brewer’s admission that the press release had misstated the company’s margin expansion. Instead of a projected 500 basis points or 5% growth for 2024, the actual increase will only be 50 basis points or 0.5%. This correction drastically changed investor sentiment towards the stock.

Following the correction, Lyft’s stock experienced a significant drop, losing more than 60% of its initial gain. This decline resulted in a market cap loss of over $2 billion, a significant blow for a company that was valued at less than $5 billion at the end of the day. Despite still being more than 80% off its debut price, the stock managed to regain some ground and is currently up about 16%.

Positive Outlook for Future

Despite the setback caused by the error, Lyft remains optimistic about its future prospects. Gross bookings for the first quarter are expected to be between $3.5 billion and $3.6 billion, surpassing analysts’ estimates. In addition, Lyft anticipates generating positive free cash flow for the full year for the first time, thanks to slightly lower capital expenditures in 2024 compared to the previous year.

Ever since Lyft went public in 2019, the company has faced numerous challenges. Its struggle to compete with larger rival Uber and its cash bleed to pay for drivers have weighed heavily on its financial performance. Despite the recent rollercoaster ride in the stock market, Lyft CEO David Risher remains positive. Risher highlighted that the company achieved a record number of annual riders, with the number of rides increasing by 26% compared to the previous year and active riders rising by 10% to 22.4 million.

Lyft’s stock initially soared after the company announced better-than-expected earnings. However, the positive sentiment quickly faded away when a major error in the press release was revealed. The correction led to a significant decline in the stock, wiping out billions of dollars in market cap. Nevertheless, Lyft remains hopeful for the future with strong bookings for the first quarter and the anticipation of generating positive free cash flow for the full year. As the competition in the ride-hailing industry continues to intensify, only time will tell if Lyft can sustain its recovery and regain investor confidence.


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