Why Lyft Stock Is Skyrocketing Today

Shares of Lyft (NASDAQ: LYFT) are surging on Friday. The ride-sharing company's stock gained 27.4% as of 3:25 p.m. ET and was up as much as 28.3% earlier in the day. The jump comes as the S&P 500 (SNPINDEX: ^GSPC) and the Nasdaq Composite (NASDAQINDEX: ^IXIC) were essentially flat.

The company reported a profitable Q1 and announced a significantly expanded share buyback program.

Lyft achieves another profitable quarter

Lyft once again is operating in the black, after years of struggling to turn a profit. This marks the third positive quarter of the last four. The company's net income of $2.57 million, albeit a small profit, is a large improvement compared to Q1 2024's net loss of $31.54 million. And its 14% top-line growth slightly missed Wall Street's target, but the continued profitability appeared more important to investors.

Investors were also impressed with Lyft's free cash flow of $280.7 million, more than doubling the analyst estimate of $136.3 million.

Operationally, it was also a positive quarter; the company's total rides jumped 16%, exceeding expectations. CEO David Risher pointed out that the quarter marked "the 16th straight period of double-digit year-over-year gross booking growth for the company."

Image source: Getty Images.

Lyft expands its share buyback program

On the strength of its free cash flow generation, Lyft announced it has authorized up to $750 million in stock buybacks. This substantial buyback program signals management's confidence in the company's financial position. Investors took note.

The company is turning a corner

Despite today's gains, the stock has shed nearly 80% of its value since March 2021. However, the combination of profitability and strong operational growth gives the company momentum. It is also valued at less than a third of Uber in price-to-sales. I think Lyft can make a decent addition to your portfolio.

Should you invest $1,000 in Lyft right now?

Before you buy stock in Lyft, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Lyft wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $617,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $719,371!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 163% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Uber Technologies. The Motley Fool has a disclosure policy.