Lyft’s stock has outperformed the market over the last year.
The holidays are nearly upon us, and the end of the year is coming soon. While that typically means nice family dinners and presents, it’s also a good time to reflect on investments. Specifically, you can see how certain stocks have done over the past year. It’s a fun exercise and can provide clues into the future.
So, how would you have fared if you’d invested $100 in the ride-sharing company Lyft (LYFT +0.10%)?
Image source: Getty Images.
Doing the math
Lyft’s stock gained 28% over the past year, through Nov. 19. It’s instructive to compare that to a broad U.S. stock market index, such as the popular S&P 500, which returned 13.7%.
The stock’s outperformance means you would have more money than if you had invested passively in the S&P 500. A $100 investment in Lyft’s shares a year ago is worth $128; the same amount invested in the index would have turned into about $114.
What should long-term investors do?
Things have certainly been going well for Lyft lately. In the third quarter, bookings and active riders grew 16% and 18% year over year, respectively. That helped drive revenue up by 11%.
The ride-hailing market consists of two major companies, market leader Uber Technologies and Lyft. That means the latter faces limited competition right now.
Today’s Change
(0.10%) $0.02
Current Price
$19.78
Key Data Points
Market Cap
$8B
Day’s Range
$18.85 – $20.01
52wk Range
$9.66 – $25.54
Volume
19M
Avg Vol
21M
Gross Margin
35.24%
Dividend Yield
N/A
But technology changes rapidly. Lyft has been adapting by entering into partnerships, including one with Alphabet‘s Waymo. With improving financials and partnerships, Lyft appears poised to continue delivering strong shareholder returns.
Lawrence Rothman, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Uber Technologies. The Motley Fool recommends Lyft. The Motley Fool has a disclosure policy.