Lyft Stock Is Soaring After Earnings. Here's Why

closeup of lyft signage at sundance film festival in 2023

(Image credit: Mat Hayward/Getty Images)

Lyft (LYFT) stock is racing up the price charts Thursday after the ride-sharing company beat top- and bottom-line expectations for its third quarter and raised its full-year outlook.

In the three months ended September 30, Lyft's revenue increased 31.5% year over year to $1.5 billion, boosted by a 15.6% jump in gross bookings to $4.1 billion. Its earnings per share (EPS) improved 20.8% from the year-ago period to 29 cents.

"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," said Lyft CEO David Risher in a statement. "Going forward, our work with best-of-breed partners and the autonomous future we're building will give people even more reasons to choose Lyft every time."

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The results beat analysts' expectations. Wall Street was anticipating revenue of $1.4 billion and earnings of 20 cents per share, according to CNBC.

As a result of its strong performance in the first nine months of 2024, Lyft raised its outlook for the full year. It now expects to achieve gross bookings growth of approximately 17%, up from its previous forecast of "growth that is slightly faster than Rides growth year-over-year" and ahead of analysts' expectations of 16.3% growth.

Lyft also provided its outlook on the fourth quarter, calling for gross bookings in the range of $4.28 billion to $4.35 billion, representing year-over-year growth of 15% to 17% and ahead of analysts' expectations of $4.23 billion.

Is Lyft stock a buy, sell or hold?

Heading into Thursday's session, Lyft stock was down 4% for the year to date, but Wall Street was anticipating a comeback. According to S&P Global Market Intelligence, the consensus recommendation among covering analysts is a Buy.

And analysts' average price target of $16.72 represented implied upside of 16% to October 6 close. This target price now sits at a discount to the industrial stock's post-earnings price, which may prompt analysts to lift their price targets in response.

Indeed, financial services firm Wedbush raised its price target to $20 from $12 following the earnings release, but maintained its a Neutral rating (equivalent to a Hold) on the mid-cap stock.

"We are encouraged by positive commentary in the quarter suggesting healthy progress along product initiatives and new partnerships," says Wedbush analyst Scott Devitt. "That said, we continue to view management's longer-term targets with some skepticism, and we remain sidelined as we wait for clear evidence of a more sustainable growth trajectory for the business."

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.