Digital Adoption Fuels Growth for Affirm and Lyft Stocks

A report highlights the optimistic earnings outlook for Affirm Holdings and Lyft Inc., driven by significant revenue growth and improving cash flow prospects. Investors are encouraged as both companies are positioned for potential earnings beats in their upcoming reports.

Date: 10-11-2024

AI Rating: 8

The report discusses expectations surrounding two large-cap financial technology stocks, Affirm Holdings Inc. (AFRM) and Lyft Inc. (LYFT), both set to report earnings soon. This anticipation is fueled by a combination of a positive Zacks Rank and Earnings Surprise Prediction (ESP), indicating a strong possibility of earnings beats, which usually positively influences stock prices.

Affirm Holdings Inc. (AFRM): Affirm has demonstrated substantial revenue growth, reporting an impressive 46.3% increase year over year for fiscal 2024. The positive momentum is attributed to diverse income streams and key partnerships that enhance their market position. The report highlights that earnings per share (EPS) estimates for the first quarter of fiscal 2025 suggest a 5.3% increase in earnings expectations compared to the prior estimates. Additionally, the 29.7% year-over-year growth projection for revenues in fiscal 2025 further supports a bullish outlook for the stock.

Lyft Inc. (LYFT): Lyft's financial outlook reflects optimistic expectations of achieving positive free cash flow for 2024, with an anticipated conversion of over 90% of adjusted EBITDA to free cash flow. This is a considerable improvement over previous expectations. The report indicates that for the third quarter of 2024, Lyft expects revenues to show a year-over-year increase of 23.3%. Furthermore, consistent positive EPS revisions signal growth potential and sustained investor confidence in its performance.

Overall, both stocks exhibit strong revenue growth and positivity in earnings estimates. Investors are likely to view these earnings reports closely, as successful earnings beats could lead to substantial upward movement in stock prices, given the favorable projections presented in the report.

Stocks: AFRM LYFT