By Dean Seal
Shares of Lyft surged after the ride-hailing company boosted its stock-buyback program and reported its strongest first quarter yet, powered by healthy ridership trends.
The stock was up 24% at $16.06 at about midday. Shares have taken big swings in the past 12 months and were trading around $17.24 this time a year ago.
"In the on-again, off-again relationship that Lyft stock seems to have with earnings results, this print definitely fell into the on-again category," Benchmark analyst Daniel Kurnos said in a research note on Friday morning.
The San Francisco company said after Thursday's closing bell that it gave 16% more rides in the first quarter than it did a year earlier, beating analyst projections, and that it had 11% more active riders. The higher rider frequency and total rider count translated to a 13% jump in gross bookings to $4.16 billion, ahead of analyst estimates, according to FactSet.
Chief Executive David Risher said cash-strapped consumers are turning to the Lyft app as the cost of buying a car gets inflated by the global trade war.
"It's a lot more approachable to think of a $10 or $15 ride than it is a $30,000 car that just got more expensive," Risher said.
The San Francisco-based company isn't showing any signs of consumer softness and its focus on new products and offerings seem to be working, Oppenheimer analysts said in a research note as they maintained a bullish rating on the stock.
The company is also seeing big gains in riders using the Lyft app for commuting, which now accounts for a third of total Lyft rides.
That's been aided in part by Lyft's price-lock feature, which allows customers to fix the price of regular rides between two set points at similar times of the day, Risher said. The recently introduced feature saw a 21% jump in membership from the prior quarter, with a retention rate higher than 70%, according to CEO Risher.
Analysts from several firms said the company's decision to boost its share-repurchase program to $750 million from $500 million is a boon for the stock. Activist hedge fund Engine Capital on Friday dropped its nomination of two candidates for Lyft's board of directors, citing the increased buyback program as part of its rationale.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
May 09, 2025 11:55 ET (15:55 GMT)
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