SAN FRANCISCO – Lyft Inc. (NASDAQ:LYFT) announced the upcoming departure of Kristin Sverchek, the company's President, effective August 20, 2024. Sverchek will continue to serve as an advisor until November 30, 2024. This change was reported in a Form 8-K filing with the Securities and Exchange Commission on Tuesday.
Sverchek's exit is not due to any disagreements with Lyft’s operations or management. CEO David Risher praised her contributions, stating, "Kristin helped pour the foundation the entire rideshare industry rests upon." He credited her for shaping both the company and the sector during her tenure.
As per the terms agreed upon, Sverchek will receive severance benefits under Lyft’s Executive Change in Control and Severance Plan. She is set to receive a cash payment of $650,000, equivalent to one year of her base salary, and 100% vesting of her unvested restricted stock units (RSUs). Additionally, she will receive a lump sum equivalent to 12 months of COBRA coverage, and a cash payment of $487,500, which reflects a prorated bonus for 2024. These benefits are contingent upon Sverchek executing a release of claims in favor of Lyft and complying with post-employment obligations.
During her advisory period, Sverchek will receive a monthly retainer of $10,000, and her RSUs will continue to vest as per the original schedule, provided she remains a service provider to Lyft. Any compensation she earns from full-time employment outside of Lyft before the end of the consulting period may offset these payments.
In conjunction with Sverchek's departure, Lyft has amended its bylaws, effective July 22, 2024, to make the President position a discretionary role rather than a mandatory one. This amendment is part of the company's Amended and Restated Bylaws and is detailed in the same SEC filing.
In other recent news, Lyft continues to navigate a complex landscape of financial projections and regulatory challenges. TD (TSX:TD) Cowen has maintained a Hold rating on Lyft shares, projecting a 35.4% year-over-year revenue growth for Q2 2024, driven by an 18.5% annual increase in gross bookings. The firm's revenue estimate of $1.38 billion is slightly below the consensus, with EBITDA expected to reach $99.5 million.
Similarly, Melius Research initiated coverage on Lyft with a Hold rating, highlighting the company's significant presence in the North American market. Despite recent legal developments involving gig worker status, BofA Securities has maintained a Buy rating on Lyft's stock, clarifying that the recent federal ruling does not affect the state appeal process or Proposition 22.
BTIG also maintained a Neutral rating on Lyft, noting a deceleration in sales growth compared to the previous year. These are recent developments in the rideshare company's journey, which includes ambitious financial targets for 2027 and the Massachusetts Supreme Judicial Court approving ballot initiatives that could redefine the relationship between Lyft and its drivers.
InvestingPro Insights
As Lyft Inc. navigates through its executive transition, investors are closely monitoring the company's financial health and market performance. According to recent data from InvestingPro, Lyft holds a market capitalization of $5.08 billion, reflecting its standing in the competitive rideshare market. Despite a challenging environment, the company has managed to maintain a positive revenue growth, with a 10.9% increase over the last twelve months as of Q1 2024 and an even more impressive quarterly revenue growth of 27.65% in Q1 2024.
Investors should note, as per InvestingPro Tips, that Lyft is expected to grow its net income and sales in the current year. This is particularly noteworthy given that the company has not been profitable over the last twelve months. However, analysts are optimistic, predicting profitability for Lyft this year. It's also important to consider that the company's stock has experienced significant volatility, with a price decrease of over 26% in the last three months as of the data date.
For those considering an investment in Lyft, or current shareholders looking to deepen their analysis, there are additional InvestingPro Tips available. For instance, while Lyft holds more cash than debt, short-term obligations exceed its liquid assets, which could be a point of concern for risk-averse investors. Furthermore, the stock is trading at a high Price/Book multiple of 10.34, suggesting that it may be valued richly in relation to its book value.
To explore these metrics further and access additional expert analysis, visit https://www.investing.com/pro/LYFT. Remember, using the coupon code PRONEWS24 can get you up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing a comprehensive suite of tools and insights to inform your investment decisions. There are a total of 9 additional InvestingPro Tips available for Lyft, which could offer valuable guidance in light of the company's recent executive changes.
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