Lyft Inc (NASDAQ: LYFT) rallied more than 20% on Friday morning after reporting its financial results for the first quarter that topped Street estimates on most fronts.
But factors beyond the numbers are contributing to the rise in LYFT shares.
For starters, the company’s board authorised a significant boost to the stock buyback programme.
According to Lyft, as much as $500 million of it will be executed over the next year.
The share repurchase plan indicates management’s confidence in what the future holds for Lyft stock through the remainder of 2025.
Lyft is not seeing signs of a consumer slowdown
Investors are cheering Lyft’s Q1 earnings release this morning also because David Risher, its chief executive, said the American consumer was not showing any signs of a slowdown yet.
Concerns of a potential recession in the back half of this year have been brewing lately in the wake of the Trump administration’s aggressive tariffs on friends and foes alike.
However, “our team is stronger than it’s ever been, and the consumer demand is absolutely there,” Risher told CNBC in a post-earnings interview on Friday.
Including today’s gain, Lyft shares are up well over 50% versus their low in early April.
Highlights from Lyft’s Q1 earnings release
On Friday, the ride-hailing giant reported a 13% year-on-year increase in gross bookings to $4.16 billion for its fiscal Q1.
Analysts had called for a marginally lower $4.15 billion instead.
According to the Nasdaq-listed firm, the total number of rides in the first quarter also went up 16% to 218.4 million, handily beating experts’ forecast of 215.1 million.
Lyft stock is up also because the San Francisco headquartered firm turned a profit (a cent per share) in its recently concluded quarter, a meaningful improvement from 8 cents a share of loss last year.
Note that LYFT is not a dividend stock, though.
Is it too late to invest in Lyft stock?
The only metric on which Lyft disappointed in its fiscal Q1 was revenue that printed at $1.45 billion (up 14% annually).
Street was at a slightly higher $1.47 billion instead.
Still, Eric Sheridan – a Goldman Sachs analyst continues to see upside in LFYT to $20 on “a rapid cadence of product innovation in consumer offerings and rising driver supply affinity enhancing the forward growth trajectory.”
Sheridan is convinced that Lyft will benefit from self-driving vehicles as “AV operators and fleet owners continue to enter into partnerships in the coming years.”
Last night, Lyft guided for a further mid-teen percentage increase in ride bookings for its fiscal Q2.
All in all, the investment firm is bullish since the company’s stock price appears “dislocated from its earnings power in the next 2-3 years.”
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