Why Lyft Stock Was Soaring Today

Shares of Lyft (NASDAQ: LYFT), the No. 2 ride-sharing company, were moving higher today after the company reported strong results in its third-quarter earnings report, including record trips.

As of 1:39 p.m. ET, the stock was up 22.9%.

Image source: Getty Images.

Lyft is accelerating

Lyft continues to deliver solid growth, with gross bookings up 16% in the quarter, driving revenue up 32% to $1.52 billion. This beat estimates at $1.44 billion, as the company deployed incentives to riders and drivers more efficiently.

Active riders rose 9% in the quarter to 24.4 million, and rides rose 16% to 217 million.

That performance continued to deliver growth on the bottom line, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from $92 million to $107.3 million.

Lyft ramped up spending on sales and marketing, which led to flat growth in a generally accepted accounting principles (GAAP) loss per share of $0.03, which was below the consensus at $0.20 per share.

Investors seemed willing to look past the weak bottom-line result due to strong top-line growth, solid guidance, and new partnerships with self-driving car companies including Mobileye, May Mobility, and Nexar to connect riders to autonomous vehicles.

CEO David Risher said, "Our team delivered one of the strongest quarters in Lyft history, following the many new innovations we've brought to drivers and riders so far this year."

What's next for Lyft?

Looking ahead, Lyft sees gross bookings rising 15%-17% to $4.28 billion-$4.35 billion in the fourth quarter, and adjusted EBITDA of $100 million-$105 million.

It also called for similar growth rates for the full year and raised its adjusted EBITDA margin guidance from 2.1% to 2.3%.

Lyft continues to deliver steady growth, and its investments across the business are paying off. Given that, the beaten-down stock looks like a good bet to keep climbing.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $23,324!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $42,133!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $420,761!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of November 4, 2024

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Mobileye Global. The Motley Fool has a disclosure policy.