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Lyft Q2 Preview: Can an EPS Beat Drive Shares Upwards?

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Yesterday, Uber Technologies UBER shares soared, tacking on an impressive 19% in value following the release of its 2022 Q2 earnings report.

It also put Lyft LYFT, another ride-hailing titan, in the spotlight, as the company is slated to release its quarterly results after the market closes on Thursday, August 4th.

It raises a valid question; how does Lyft stack up heading into its quarterly report? Let’s take a glance at Uber’s Q2 results and other metrics in order to find out.

Uber Q2

Uber reported quarterly EPS of -$1.33, missing the Zacks Consensus EPS Estimate of -$0.25 by a sizable margin. However, quarterly sales came in at $8.1 billion, reflecting a solid 8.6% revenue beat. Below is a chart illustrating the company’s income on a quarterly basis.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

However, a reason for the upwards move in Uber shares could be attributed to its free cash flow – Uber reported quarterly free cash flow of $382 million, providing investors relief that the company won’t run out of cash.

In addition, gross bookings grew 33% year-over-year to $29.1 billion, in the upper half of the company’s guidance range. Adjusted EBITDA came in at $364 million, substantially higher than the prior guidance range, with the company citing strong results across its segments.

Uber also provided guidance for 2022 Q3 – total company gross bookings is expected to be between $29 - $30 billion, and total company Adjusted EBITDA is expected in the range of $440 - $470 million.

All in all, there were some major positive highlights, helping explain why Uber shares soared. Now, let’s take a look at Lyft.

Lyft

Lyft LYFT shares primarily traded sideways over the last month, but shares tacked on a jaw-dropping 16% following Uber’s quarterly results. The momentum heading into the print is massive.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Additionally, top and bottom-line estimates for the quarter display sizable growth. One analyst has upped their earnings outlook for the quarter over the last 60 days, with the Consensus Estimate Trend climbing 16.7%.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

The Zacks Consensus EPS Estimate of -$0.05 reflects a rock-solid 16.7% uptick in quarterly earnings year-over-year.

Lyft’s top-line looks to register some serious growth as well – the quarterly revenue estimate of $1 billion pencils in a 31% uptick compared to year-ago sales of $765 million.

Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Lyft has primarily reported bottom-line results above expectations, exceeding the Zacks Consensus EPS Estimate in eight of its last ten quarters. Just in its latest quarter, the company posted a sizable 200% bottom-line beat.

Top-line results have also been stellar – the company hasn’t posted a top-line miss in any of its previous thirteen quarters.

Putting Everything Together

Lyft shares soared yesterday on the back of Uber’s quarterly results, and the same could be in store following its own quarterly report.

Uber experienced many positives during the quarter, including an increased number of bookings and turning a positive free cash flow. However, the company did miss on the bottom line quite significantly.

Lyft is forecasted to register sizable growth on both the top and bottom line, share performance over the last month has been stellar, and the company has consistently exceeded quarterly estimates.

Currently, Lyft LYFT is a Zacks Rank #2 (Buy) with an overall VGM Score of a B – undoubtedly a favorable pairing heading into the print.


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