Why 2022 could be a big year for Lyft stock
Lyft Inc (NASDAQ:LYFT) announced that it will release its fourth-quarter earnings after the close on Tuesday, Feb. 8. Most recently, LYFT reported earnings of $0.05 per share for its third quarter, and this time around Wall Street analysts anticipate the company's earnings per share (EPS) will come in at an increased $0.09.
The stock is prone to wild swings after earnings, including a 10.2% drop in August 2021, and a 21.7% pop after its May 2020 earnings. Half of the time, LYFT was positive in its past eight post-earnings sessions, averaging an 8.5% move, regardless of direction. This time around, though, the options pits are pricing in an even bigger swing of 15.7% the day after its quarterly report.
Speaking of options pits, LYFT's have been overwhelmingly bearish. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity sports a 10-day put.call volume ratio of 1.85, which sits higher than all other readings from the past year. This implies long puts haven't been more popular during this time period.
The equity may have been an easy target for these bears. LYFT bottomed out at an annual low of $33.94 on Jan. 28, with the formerly supportive 20-day moving average blocking its attempt to rally from this area. This technical setup has left Lyft stock at an 11.5% year-to-date deficit, and down 26.9% year-over-year.
A look a Lyft's financials shows that the ridesharing company’s revenues have grown 30% since fiscal 2018 despite experiencing a 34% decline in annual sales for fiscal 2020 largely due to the pandemic. LYFT has also increased its net income by about $1.4 billion over the past two years, going from $2.6 billion in net losses to $1.2 billion since fiscal 2019.
In addition, Lyft has a decent balance sheet with $2.38 billion in cash and $1.02 billion in total debt, giving the company some security, should it continue to take a loss on the bottom line. Nonetheless, LYFT is estimated to report positive earnings of $0.80 per share, and grow revenues 38% in fiscal 2022, potentially setting the stock up for a significant growth this year.