What Happened?

Shares of ride sharing service Lyft (NASDAQ: LYFT) fell 14.6% in the pre-market session after the company reported disappointing fourth-quarter results: Its revenue slightly missed, and its EBITDA guidance for the next quarter fell short of Wall Street's estimates. The outlook suggests some bumps in the road ahead, but this quarter still had its bright spots as Lyft blew past analysts' EBITDA and EPS expectations. Expectations had soared earlier in the week after the company signaled a possible expansion into the autonomous vehicle market, making the underwhelming guidance all the more concerning. Overall, this was a weaker quarter.

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What The Market Is Telling Us

Lyft’s shares are very volatile and have had 29 moves greater than 5% over the last year. But moves this big are rare even for Lyft and indicate this news significantly impacted the market’s perception of the business. 

The previous big move we wrote about was 2 days ago when the stock gained 5.5% on the news that the company announced plans to launch self-driving robotaxis in collaboration with Mobileye "as soon as 2026." Lyft's CEO, David Risher, posted on X that the company will also partner with Marubeni, a Japanese conglomerate specializing in auto and fleet financing. Risher added that putting more autonomous vehicles on the road could expand Lyft's addressable market. The company plans to launch in Dallas before expanding to other markets.

Lyft is down 1.1% since the beginning of the year, and at $13.50 per share, it is trading 33.4% 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 $278.53.

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