Stock Story -
What Happened: Shares of ride sharing service Lyft (NASDAQ: LYFT) jumped 6.6% in the morning session as the major indices soared (Nasdaq +1.9%, S&P +1.2%) after Walmart (NYSE:WMT)'s earnings and retail sales data revealed strong consumption patterns in the U.S. economy.
Walmart exceeded analysts' revenue and EPS expectations in Q2'2024. Moving on, the company raised its full year outlook for net sales and EPS as well, another major positive.
CFO, John David Rainey added "We see, among our members and customers, that they remain choiceful, discerning, value-seeking, focusing on things like essentials rather than discretionary items, but importantly, we don't see any additional fraying of consumer health."
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What is the market telling us: Lyft’s shares are very volatile and over the last year have had 39 moves greater than 5%. In context of that, today’s move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 8 days ago, when the stock dropped 16.2% on the news that the company reported second quarter earnings results. Q3 guidance was below expectations for both gross bookings and adjusted EBITDA, which weighed on the stock. On the other hand, its revenue and adjusted EBITDA both outperformed Wall Street's estimates. Overall, it was a mixed but weaker quarter for the company.
Lyft is down 22.2% since the beginning of the year, and at $10.75 per share it is trading 47% below its 52-week high of $20.28 from March 2024. Investors who bought $1,000 worth of Lyft’s shares 5 years ago would now be looking at an investment worth $203.51.
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