-
Lyft jumps 13% after the ride-hailing app said it could turn a profit by the end of the year – if vaccines power a rebound
Summary List PlacementThe Lyft stock price jumped as much as 13% in pre-market trading on Wednesday, after the ride-hailing app said it could be profitable by the end of the year if vaccines help people return to normality. Lyft's revenue fell 44% year on year in the fourth quarter to $569.9 million, its earnings showed on Tuesday, with the COVID-19 pandemic continuing to batter its business model. But analysts chose to see the light in the earnings, including the company saying it had exceeded its cost-cutting goals and that a "strong summer rebound" could lead to a return to profit later this year. Lyft stock was up 11.86% in pre-market trading to $60.00 at 7.40am ET. It has risen around 90% since the start of October - to roughly the same price as a year ago - as investors bet that the arrival of vaccines will fuel a recovery among struggling firms. Read More: An ex-Merrill Lynch ETF maven shares how to construct a portfolio that's perfect for today's market landscape – including 4 must-have sectors for sustainable returns After reporting $1.02 billion in revenues for the final quarter of 2019, Lyft's revenue declined to $955.7 million in the first quarter of 2020 and $339.3 million in the second quarter of last year. Lyft bounced back slightly with $499.7 million in revenue in the third quarter of 2020. In the fourth quarter, ridership was still down 51% year on year. But CEO Logan Green told investors on Tuesday: "I believe we are now in a stronger position than at any time in the past, given the improvements we've made to our unit economics and our overall cost structure." "We're like a tightly coiled spring positioned to drive strong organic growth and margin expansion as the recovery takes hold," he said. Logan added that the company expects to take advantage of "pent-up demand" among US consumers. Ride-hailing companies like Lyft and Uber saw earnings plummet in 2020, as COVID-19 lockdowns curbed travel for most of the year. Yet their share prices have recovered sharply since tumbling in the spring of last year, thanks to optimism about coronavirus vaccines. Shares in rival Uber were up 6.86% in pre-market trading at $63.70 ahead of its fourth-quarter earnings release on Wednesday. Read More: GOLDMAN SACHS: Buy these 26 'best of both worlds' stocks set to soar with economic recovery even if interest rates stay lowJoin the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid
More like this (3)
-
Uber falls after quarterly revenue misses Wall Street's expectations (UBER)
Summary List PlacementUber shares fell by as much as 5% early Thursday as revenue in the...
-
Deutsche Bank posted its first annual profit since 2014 as volatile markets helped its investment bank boom
Summary List PlacementDeutsche Bank posted a full-year profit for the first time since 2014 last year,...
-
Salesforce falls 7% after confirming $27.7 billion Slack acquisition and forecasting slower growth
Summary List Placement Salesforce shares dipped as much as 6.5% in early Wednesday trading after the...
