Why Lyft Inc. (LYFT) Crashed on Wednesday

We recently compiled a list of the Heavy Selling Drags Share Prices of These 10 Firms. In this article, we are going to take a look at where Lyft Inc. (NASDAQ:LYFT) stands against the other stocks.

Wall Street’s major indices finished mixed on Wednesday, though generally pessimistic, as investor sentiment was dampened by higher-than-expected consumer price data which fueled concerns of a potential inflation rebound.

The Dow Jones and S&P 500 declined by 0.50 percent and 0.27 percent, respectively. Only Nasdaq posted gains, albeit a marginal 0.03 percent.

Among Wednesday’s losers, 10 companies were the worst performers, primarily due to disappointing earnings results, dismal outlook guidance, and downgraded ratings, among others. In this article, we have detailed the specific reasons behind their lagging performance.

To come up with Wednesday’s top losers, we considered only the stocks with at least $2 billion in market capitalization and $5 million in daily trading volume.

A ridesharing passenger and driver in a car, looking out the window in anticipation of their destination.

Lyft Inc. (NASDAQ:LYFT)

Ride-hailing giant Lyft Inc. decreased for a second day on Wednesday, losing 7.92 percent to close at $13.25 each, as investors shunned news of earnings improvement last year.

In its latest earnings release, Lyft said it swung to a net profit of $61.7 million in the last quarter of 2024 from a $26.3 million net loss in the same quarter a year earlier. Net income for the full year 2024, however, was lower at $22.8 million, albeit a reversal of the $340.3 million net loss in 2023.

Revenues in the quarter, however, increased by 25 percent to $1.5 billion from $1.2 billion year-on-year, while revenues for the full year grew 31 percent to $5.78 billion from $4.4 billion year-on-year.

For the first quarter of the year, Lyft expects rides volume to grow mid-teens on a year-on-year basis driven by industry-leading service levels and strong rider and driver growth and engagement.

It also expects gross bookings to grow between 10 to 14 percent, or approximately $4.05 billion to $4.20 billion.

Overall LYFT ranks 4th on our list of Wednesday’s top losers. While we acknowledge the potential of LYFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LYFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.

Disclosure: None. This article is originally published at Insider Monkey.