Lyft: A Comedy of Errors (and Earnings)

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So, Lyft (LYFT 14.75%). Ah, yes. The ride-sharing company that occasionally gets you from point A to point B without, you know, a flaming wreck. Though, looking at that stock chart today, one might think there was a multi-car pile-up. It tumbled 14.1% this morning. A tragedy? A farce? Let’s investigate, shall we?

Analysts, bless their number-crunching hearts, thought Lyft would pull in $1.75 billion in sales last quarter. Instead? A measly $1.6 billion. A shortfall! The horror! But wait… they earned $6.81 a share! Sixty-eight cents? No, dollars! Per share! That’s… well, it’s a number, isn’t it? Don’t get too excited, though. It’s like finding a twenty in your old coat… and then realizing it’s Monopoly money.

Lyft’s Q4: A Statistical Illusion?

Turns out, that $6.81 includes a “benefit from the release of the valuation allowance.” Translation: accounting magic. It’s a one-time thing, folks. A fleeting mirage in the desert of quarterly reports. They can’t just keep pulling rabbits out of hats, no matter how desperately they need to impress Wall Street. It’s not sustainable. Though, frankly, a rabbit would be a nice addition to the Lyft experience. Think of the marketing possibilities!

Investors, being the discerning bunch they are, saw right through it. They weren’t fooled by the shiny number. They wanted… substance. And what did they find? Gross bookings up 19% year-over-year. Good! Revenue up only 3%. Oof. That’s like ordering a magnificent feast and getting a single breadstick. And to add insult to injury, “certain legal, tax, and regulatory reserve changes and settlements” weighed things down. Apparently, even ride-sharing companies can’t escape the clutches of the legal system. Who knew?

For the whole year, Lyft managed $18.5 billion in gross bookings (up 15%), $6.3 billion in revenue (up 9%), and a net income of $2.8 billion. Sounds impressive, right? Until you realize that $2.8 billion is pretty much the same as what they earned in Q4… thanks to that same accounting trick. It’s like a magician doing the same card trick over and over again, hoping you won’t notice.

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Is Lyft a Sell? Or Just… Confusing?

So, Q4 was… messy. A statistical funhouse mirror. But hold on! There’s a glimmer of hope! Lyft generated $1.1 billion in free cash flow in 2025. That’s a 47% jump! They’re actually generating cash! Imagine that! They say bookings are still growing in the high teens. Which means people are still hailing rides, despite the occasional surge pricing and questionable driver playlists.

Now, let’s do some quick math. A 6x price-to-free cash flow ratio, with growth in the double digits… Hmm. That sounds… promising. Dare I say… a buy? Yes, folks, I’m going out on a limb. A slightly wobbly, potentially disastrous limb, but a limb nonetheless. Lyft stock is a buy. Unless, of course, I’m completely wrong. In which case, please don’t send me angry letters. I’m just a humble financial journalist, trying to make sense of the madness. And occasionally, injecting a little bit of silliness into the process. Because, let’s face it, the stock market is already silly enough.

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2026-02-11 19:44