The ridesharing company Lyft was among the stocks that rose in premarket trading Wednesday. With the interest in the company rising, Lyft’s stock was up 5.7% before the start of the trading session. Investors felt motivated after the company reported a 26% boost in rides during May.
The jump in rides shows that the company’s services have been increasing in the last 7 weeks. If the June levels of ridership remain the same, the company expects the adjusted EBITDA loss for the second quarter to be below $325 million. If these predictions turn out to be true, compared to the initial expectations, the adjusted EBITDA loss will be reduced by $35 million.
Taking into account the number of rides in April, Lyft’s ridership increased significantly in May. Despite that, the company stated that the overall number of lifts in the US is 70% lower, compared to the same period of the previous year. This being said, as some cities in the US had already lifted stay-home restrictions, the services of Lyft began to rise in May.
The increase in rides was noticeable in Austin, Texas, where ridership was up 73% in May. Nashville, Tennessee is another city where shelter-in-place orders were relaxed and Lyft rides increased by 64%.
Despite the higher number of ridership in May, Lyft was still seriously impacted by the lockdowns during the pandemic. As a way to deal with the losses throughout the coronavirus crisis, Lyft decided to lay off about 1,000 of its employees. This number represents 17% of the company’s workforce.
Analyst stock price forecast and recommendation
According to CNN Money, 35 analysts who provide 12-month price forecasts for Lyft Inc. have a median price target of $40.00, with a high estimate of $75.00 and a low estimate of $28.00. The median estimate represents a +16.79% increase from the last price of $34.25.
The same source of media also offers recommendations for the Lyft Inc. stock. About 40 investment analysts have currently rated the company as “Buy”, with 24 of them rating the stock as “Buy”, 15 as “Hold” and 1 – as “Outperform”.