Why LYFT Is Sinking Today

Lyft (LYFT) is retreating 8% after the ridesharing company reported fourth-quarter revenue that was in line with analysts’ average estimate and provided first-quarter guidance that was below their mean outlook. On the positive side, LYFT’s Q4 earnings per share did come in well above analysts’ average estimate.

A Look at LYFT’s Q4 Results and Its Q1 Guidance

The firm’s revenue jumped 27% in Q4 versus the same period a year earlier to $1.6 billion. The latter figure was roughly in line with analysts’ average estimate. However, it generated earnings per share of 6 cents, high above analysts’ average estimate of a loss per share of 1 cent. In Q4, its gross bookings rose 15% year-over-year to $4.3 billion, in line with the mean outlook.

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

For Q1, however, the company anticipates that its gross bookings will come in at $4.05 billion to $4.20 billion, versus analysts’ average estimate of $4.23 billion. What’s more, it predicts that it will generate Q1 EBITDA, excluding certain items, of $90 million to $95 million. The midpoint of the latter range is $92.5 million, which is slightly below analysts’ average outlook of $93.7 million.

Also noteworthy is that the company instituted a share buyback plan for the first time, reporting that it would repurchase as much as $500 million of its shares.

LYFT’s Comments

“We achieved record Gross Bookings, significant margin expansion, our first full year of GAAP profitability, and record cash flow generation,” CFO Erin Brewer said in a statement.

While we acknowledge the potential of LYFT, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. 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.

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