US Markets
Wednesday, February 14th, 2024 3:55 pm EDT
Key Points
- Lyft shares surged over 37% despite a major error in its earnings press release.
- Initially reported a 500 basis point expansion in adjusted earnings margin for 2024, later corrected to 50 basis points.
- CFO Erin Brewer disclosed the correction during the earnings call.
Lyft’s shares surged by over 37% on Wednesday despite a significant error in the reporting of its latest results, maintaining a portion of its gains even after the company admitted to a major mistake in its press release. The initial release indicated that Lyft was projecting a substantial 500 basis point expansion in its adjusted earnings margin for 2024, equivalent to 5%. However, the company later clarified that the correct figure should have been a much more modest 50 basis points, or 0.5%. This correction was disclosed by Chief Financial Officer Erin Brewer during the earnings call held on Tuesday. Although Lyft’s stock initially skyrocketed by more than 60% in after-hours trading following the release of the report, it experienced a significant cooldown in response to the correction. Despite this setback, Lyft’s full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) demonstrated a remarkable turnaround, shifting from a loss of $416.5 million to a profit of $222.4 million. Analysts at TD Cowen noted that Lyft’s fourth-quarter revenue exceeded expectations, buoyed by strong gross bookings, while the guidance for EBITDA and EDITDA also surpassed estimates. In light of these positive indicators, TD Cowen raised their target price for Lyft’s stock, reflecting optimism about the company’s performance moving forward.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/14/lyft-shares-up-16percent-in-premarket-trade-retaining-some-gains-after-forecast-error.html
