Release accidentally added an extra zero to a key number By Preetika Rana Updated Feb. 13, 2024 8:15 pm ET Lyft’s goof-up overshadowed encouraging results. PHOTO: LOREN ELLIOTT/BLOOMBERG NEWS Lyft LYFT shares soared over 60% in after-hours trading Tuesday after its earnings release accidentally added an extra zero to a key profitability metric. Lyft’s release said one of its profit margins was expected to expand by 500 basis points—or 5 percentage points—in 2024. That margin was only expected to expand by 50 basis points, the company’s chief financial officer later clarified on a call with analysts. The figure in question is a wonky but closely watched metric. The ride-sharing company was forecasting its adjusted earnings margin as a percentage of its bookings. A higher margin signals that Lyft is earning a bigger cut from its bookings. The company’s stock soared over 60% when the release came out after the close of regular trading. Many stock trades are done by computers, reacting in fractions of seconds to new information. The inflated margin likely triggered a buying frenzy before most people could digest the numbers. A Lyft spokeswoman described the mistake as “a clerical error” and said the company worked to clarify it as soon as possible. Some people reacted on X with jokes and memes. While Lyft shares gave up most of their initial gains, they were still up around 17% in later after-hours trading. The goof-up overshadowed otherwise encouraging results. The company forecast better than expected bookings for the current quarter and said it expects to be cash flow positive in 2024. Simply put, that means Lyft will generate more cash than it spends during the year. Companies often point to this metric to signal a path to future profits. Lyft isn’t profitable, but it has been trimming its losses. Rival Uber reported its first full year of profit as a public company in 2023. Investors were encouraged by Lyft’s latest outlook because Uber also swung to profitability after becoming cash flow positive. Lyft has struggled to keep up with its larger competitor, and its stock has lost about 85% of its value since listing in 2019. The company’s co-founders stepped down from day-to-day management last year, following eroding market share, a sliding stock price and low employee morale. Under its new chief executive, David Risher, the company has cut hundreds of jobs, introduced new features for riders and drivers, and mandated that employees return to the office. Risher is also looking to unload businesses that aren’t generating big returns, including Lyft’s bikes division. “As we move in 2024, we have a foot on the pedal,” Risher said on the analyst call Tuesday.
It doesn't look bullish even with the extra zero to the earnings. Perhaps they should add multiple zeros to the earnings.
%% Maybe not bullish . but it sure does does on/ 200dma/price . And bullish on close or 2 on/ 50dma Jim Cramer said they had a good quarter . May get a SEC investigation on that also he said