Here's Why Investors Should Retain LYFT Stock for Now

Lyft LYFT is bolstered by upbeat demand that is boosting its top line. The company’s proactive efforts to enhance financial security for rideshare drivers are encouraging. However, high operating expenses do not bode well for LYFT.Factors Favoring LYFTLYFT is bolstered by robust demand, achieving a 16% year-over-year increase in gross bookings in the third quarter of 2024, driving strong revenue growth. The platform supported 217 million rides and 24.4 million active riders, with total rides rising by 16%, reflecting broad demand across various use cases. Active riders grew by 9%, indicating improved retention and the addition of new users.The company's strategic deal with DoorDash DASH Call ended 8:20 AM | 15m 25s is boosting its appeal by offering exclusive benefits to DashPass members, giving millions of users more reasons to choose Lyft for their rides. Additionally, Lyft is partnering with Mobileye, May Mobility, and Nexar to connect riders with autonomous vehicles starting in 2025 in Atlanta.On Jan. 1, 2025, Lyft launched a first-of-its-kind program in Utah, partnering with Stride to contribute 7% of eligible drivers' quarterly earnings (excluding tips) to a Stride Save account for benefits such as health insurance, retirement savings and paid time off. Drivers had to achieve "Elite" Lyft Rewards status to qualify. This initiative, enabled by Utah's SB-233 legislation, aimed to provide independent contractors with access to benefits while preserving their work flexibility. Lyft’s program was designed to enhance financial security for rideshare drivers.Owing to such tailwinds, LYFT shares have risen 3.3% over the past 90 days compared with the industry’s  3.1% jump.Image Source: Zacks Investment ResearchLYFT: Key Risks to WatchLyft’s financial stability is being challenged by escalating operating expenses and weak liquidity. In the third quarter of 2024, the company’s total operating expenses increased 32% year over year. This surge in operating expenses was primarily driven by a 37.8% jump in the cost of revenues due to higher ride volumes and increased per-ride insurance costs. Moreover, general and administrative expenses rose by 29.8% year over year in the third quarter of 2024.Lyft's liquidity position is concerning. At the end of the third quarter of 2024, the company’s current ratio (a measure of liquidity) was 0.75. A current ratio of less than 1 is undesirable as it indicates that the company does not have enough cash to meet its short-term obligations.LYFT’s Zacks RankLYFT currently carries a Zacks Rank #3 (Hold).Stocks to ConsiderInvestors interested in the Zacks Transportation sector may consider Alaska Air Group ALK and C.H. Robinson Worldwide CHRW.Alaska Air Group currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. ALK has an expected earnings growth rate of 34% for the current year.The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 23.2%. ALK shares have surged 78.8% in the past year.C.H. Robinson currently carries a Zacks Rank #2 (Buy). CHRW has an expected earnings growth rate of 10.9% for the current year.The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 10.3%. Shares of CHRW have risen 18.9% in the past year.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report C.H. Robinson Worldwide, Inc. (CHRW): Free Stock Analysis Report Alaska Air Group, Inc. (ALK): Free Stock Analysis Report Lyft, Inc. (LYFT): Free Stock Analysis Report DoorDash, Inc. (DASH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks