Is Lyft stock worth buying after the earnings report error?

It’s time to pull out of Lyft Inc (NASDAQ: LYFT) that is up more than 35% on Wednesday, says Michael Morton – a MoffettNathanson analyst.

Lyft stock should be worth $13 only

The ride-hailing company reported 18 cents of per-share earnings (adjusted) for its fourth financial quarter last night that came in well above Street estimates.

Still, Morton told clients in a research note that “we are by no means Lyft bulls” even though he did upgrade Lyft stock to from “sell to “neutral” today.  

The MoffettNathanson analyst also nearly doubled his price objective on $LYFT this morning to $13 but that still represents more than 20% downside on where the stock is trading at writing.

Thousands of Uber, Lyft and DoorDash drivers in the US are expected to strike on Valentine's Day after accusing the platforms of taking disproportionately high amounts as commissions https://t.co/dRQ5FosEOi pic.twitter.com/lso69cYd97

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A 4.0% increase in the company’s Q4 revenue was in line with experts’ forecast.

$LYFT is unlikely to turn profitable anytime soon

The dovish call arrives after Erin Brewer – the chief financial officer of Lyft Inc fixed an earnings report error on the call last night. EBITDA margin expansion (adjusted), he corrected, will be 50 basis points in 2024 instead of 500 basis points that the release initially indicated.

Watch here: https://www.youtube.com/embed/oIzMngpOBl8?feature=oembed

Michael Morton of MoffettNathanson said “time to get off” the Lyft stock on Wednesday because it lacks pricing power is facing structural insurance cost headwinds.

He’s unimpressed of $LYFT also because it’s expensive compared to peers especially considering the Nasdaq-listed firm is unlikely to turn profitable on a GAAP Operating Income basis in fiscal 2024 or even 2025.

Click here to read the full earnings report of Lyft.

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