Lyft (NASDAQ) was affected by several months-long operational interruptions due to COVID-19 travel restrictions and lockdowns. LYFT will benefit as rideshare traffic recovers, however, pandemic data should improve and restrictions lessen. But given the stock’s high volatility, is it an ideal addition to one’s portfolio now? Continue reading.
Multimodal transportation networks-operator Lyft, Inc. (LYFT), which is headquartered in San Francisco, is the second-largest ride-sharing service provider in the United States and offers various transportation options through the company’s mobile-based applications. Because of reduced demand, there were several disruptions to operations during the COVID-19 Pandemic lockdown. The company should be able to benefit from rideshare’s rebounding demand, thanks to rising vaccination rates, and the relaxation of travel restrictions.

LYFT’s shares have soared in price since the company reported better than expected third-quarter earnings and outlined a path to sustained profitability on the back of drastic cost cuts and a return of riders and drivers. While the active riders increased by 11% for the third quarter ending September 30, ridership remains at 35% of the pre-pandemic peak. LYFT’s revenues increased 73% year-over-year to $864.4 million in its fiscal third quarter, ended September 30. The adjusted net income of $17.8million was 106.3% higher than the previous-year quarter. Furthermore, the company’s EPS surpassed the Street’s EPS estimate by 266.7%. John Zimmer, President of LYFT, stated that “We are seeing the right things happen in the marketplace and will start to taper incentives within the quarter ahead.”

It could be a while until the company reaches its pre-pandemic level, however, given that business travel is not fully resumed to office locations due to continued remote work and because many people are reluctant to take their children with them.

Continue reading on StockNews