Lyft Shares are Ready to Be Lifted Up Down Here

Rideshare network operator Lyft NASDAQ: LYFT stock is attempting to rally on the heels of its first adjusted EBITDA profitable quarter. While the number two rideshare operator did lower its fiscal Q1 2022 revenue guidance due to the effects of the Omicron surge, it is still maintaining its path to profitability. The Company has put its driver shortage problems behind them as new driver activations rose 50% in the quarter. The reopening trend continues in this epicenter industry as the chip shortage caused a thinner supply of new and used automobiles, consumers prefer the privacy of a rideshare vehicle over public transport. Prudent investors seeking exposure in the rideshare duopoly and pure play, can watch for opportunistic pullbacks in shares of Lyft before Omicron is also in the rearview mirror.

Q4 Fiscal 2021 Earnings Release

On Feb. 8, 2022, Lyft released its fiscal fourth-quarter 2021 results for the quarter ending December 2021. The Company reported an earnings-per-share (EPS) profit of $0.10 excluding non-recurring items versus consensus analyst estimates for a profit of $0.09, beating estimates by $0.01. Revenues rose 70.2% year-over-year (YoY) to $969.9 million versus $940.85 million. Active riders rose 49.2% YoY to 18.7 million. Revenue per Rider rose 14.1% YoY to $51.79. Q4 2021 contribution rose 83% YoY to $578.8 million setting a new contribution margin of 59.7%. Adjusted EBITDA was $74.7 million. Net losses for full-year 2021 fell by over 40%. Full-year revenues rose 36% YoY. Lyft CEO Logan Green commented, “We had a solid Q4 and achieved full-year revenue growth of 36 percent in 2021. Revenue per Active Rider, Contribution Margin and Adjusted EBITDA all reached new highs in the fourth quarter, driven by improving service levels and higher ride volumes in our marketplace,” said Elaine Paul, chief financial officer of Lyft. “Despite short-term headwinds from omicron, we remain optimistic about full-year 2022.”

Lowered Fiscal Q1 2022 Guidance

Lyft lowered its fiscal Q1 2022 revenue guidance to $800 million to $850 million, down from $983.19 consensus analyst estimates. Contribution margin is expected around 56.5% and adjusted EBITDA between $5 million to $15 million.

Conference Call Takeaways

CEO Green welcomed its new CFO Elaine Paul while Brian Roberts remains advisor until June. He detailed Q4 2021 metrics including the 70% YoY revenue growth and positive adjust EBITDA. The driver shortage is behind them as total active drivers rose 34% YoY and new driver activations are up 50% YoY. In the second half of 2021, ETAs improved by nearly 30% across all markets. He noted that Omicron was disruptive in Q1 2022 resulting in “reduced demand for rideshare”. While demand is still recovering, the expected impact of Omicron caused Lyft to lower their revenue guidance for Q1 2022. He concluded, “We are cautiously optimistic that this will continue to be the case. The demand rebound is a matter of when, not if. We are getting better and better at managing these temporary COVID-related spikes and this time around, driver supply has remained healthy. So, when we come out of this period, we expect to be very well-positioned.”

LYFT Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily time frames provides a precision near-term view of the price action landscape for LYFT stock. The weekly rifle chart peak at the $68.22 Fibonacci (fib) level. The weekly downtrend is starting to slow as the 5-period moving average (MA) starts to flatten and slope up at $38.81 followed by the 15-period MA at $41.68. The weekly 50-period MA sits at the $51.67 fib level. The weekly stochastic is attempting a divergence bottom as it tries to bounce through the 20-band as the weekly market structure low (MSL) buy triggered above $39.59. The daily rifle chart turned into an uptrend with a stalling 5-period MA support at $41.88 followed by the 15-period MA at the $39.59 weekly MSL trigger. The daily upper Bollinger Bands (BBs) sit at $46.09. Prudent investors can watch for opportunistic pullback levels at the $39.59 weekly MSL trigger, $36.61 fib, $35.51 fib, $33.14 fib, $30.71 fib, $29.17 fib, and the $26.38 fib level. Upside trajectories range from the $49.67 fib level up towards the $62.73 fib level.