LYFT Stock Drops 16% After Hours: What’s Driving the Selloff?

• Q4 revenue numbers trailed Wall Street expectations of a revenue of $1.76 billion as the company took a $168 million hit owing to certain legal, tax, and regulatory reserve changes and settlements.
• Lyft is now looking to scale robotaxi deployments on its platform.
• The company also said that it expects gross booking growth to continue to outpace rides growth through the first half of 2026 as it incorporates higher-value services onto its platform.

Shares of Lyft, Inc. (LYFT) slumped 15% after hours on Tuesday after the company guided to core profit in a range that disappointed Wall Street.

Q4 Earnings

The rideshare company reported a fourth quarter (Q4) adjusted core profit increase of 37% year over year to $154.1 million, above an analyst estimate of $147.72 million, as per Fiscal AI.

Revenue for the quarter came in at $1.6 billion, marking a growth of 3%, thanks to an increase of 19% in gross booking to $5.1 billion. However, quarterly revenue numbers trailed Wall Street expectations of a revenue of $1.76 billion as the company took a $168 million hit owing to certain legal, tax, and regulatory reserve changes and settlements.

Guidance

For the current quarter, the company expects gross booking of approximately $4.86 billion to $5.00 billion, up approximately 17% to 20% year over year. Adjusted core profit is expected to be $120 million to $140 million, lower at the midpoint than an analyst estimate of $139.57 million.  

Lyft is now looking to scale robotaxi deployments on its platform. “As we look ahead, we are entering a transformational phase for Lyft - 2026 will be the year of the AV with deployments in the U.S. and overseas,” CEO David Risher said. Lyft has partnered with several autonomous vehicle (AV) companies, including Waymo, May Mobility, Mobileye, Baidu, Nexar, Benteler Mobility, and Tensor to meet the goal.

The company also said that it expects gross booking growth to continue to outpace rides growth through the first half of the year as it incorporates higher-value services onto its platform. However, recent legislation in California aimed at cutting insurance costs is lowering rideshare costs statewide, it noted.

“While we expect this to drive increased demand over time, broad-based consumer adoption will take time to materialize and we now anticipate this being back-half weighted,” the company said.

The company’s Board of Directors has also authorized the repurchase of up to an additional $1 billion of the Company’s Class A common stock, it said.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around LYFT stock rose from ‘bearish’ to ‘extremely bullish’ over the past 24 hours, while message volume increased from ‘high’ to ‘extremely high’ levels.

LYFT stock has gained 11% over the past 12 months.

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