Lyft Analysts Weigh Earnings Beat Against Pricing Pressures, Weak Bookings

Shares of Lyft Inc LYFT were trading lower on Wednesday, despite the company reporting a fourth-quarter revenue beat.

The company reported its quarterly results amid an exciting earnings season. Here are some key analyst takeaways.

Cantor Fitzgerald On Lyft

Analyst Deepak Mathivanan maintained a Neutral rating, while cutting the price target from $15 to $14.

Lyft reported its fourth-quarter bookings 1% short of Street expectations, while delivering an earnings beat, Mathivanan said in a note. For the first quarter, the company guided to rides growth in the mid-teens and bookings growth of 10%-14% year-on-year, the midpoint of which fell short of the current consensus, he added.

The disappointing bookings guidance reflects a "deterioration in industry pricing trends" since the latter part of the fourth quarter, the analyst stated. While Lyft is making "steady progress on key product initiatives" to improve its rideshare services, this is being offset by the challenging pricing environment and "brings meaningful uncertainties to near-term growth trajectory," he further wrote.

Piper Sandler On Lyft

Analyst Thomas Champion maintained a Neutral rating, while reducing the price target from $23 to $18.

Lyft reported gross bookings of $4.28 billion for the fourth quarter, missing Street expectations of $4.32 billion, Champion said. "FCF conversion was again strong and ride frequency improved again sequentially," he wrote.

The company completed 219 million rides in the quarter, up 15% year-on-year, while active riders grew by 10% year-on-year to around 24.7 million, the analyst stated. The weaker bookings result and guidance was due to pricing headwinds resulting from competition, which "has persisted through January," he added.

Wedbush On Lyft

Analyst Scott Devitt maintained a Neutral rating, while slashing the price target from $18 to $16.

Lyft's total bookings and net revenues grew by 14.9% and 26.6% year-on-year, respectively, but both missed Street estimates by around 1%, Devitt said. Despite lower-than-expected bookings, adjusted EBITDA came in at $113 million, beating consensus of $104 million, he added.

Management guided to gross bookings growth of 10%-14% year-on-year, with the midpoint coming in below Street expectations by around 280 basis points, the analyst stated. Regarding the full year, Lyft’s partnership with Delta Air Lines Inc DAL will end in April 2025, "which management anticipates will impact rides and gross bookings growth by ~1ppt and ~2ppts, respectively, starting in 2Q25," he further wrote.

Check out other analyst stock ratings.

JPMorgan On Lyft

Analyst Doug Anmuth reiterated an Overweight rating, while cutting the price target from $19 to $16.

Lyft’s execution has improved over the past year, with the focus intensifying on "product innovation and service for both drivers and riders," Anmuth said. These initiatives drove the upside in Active Riders, up 10% year-on-year in the fourth quarter, and adjusted EBITDA, he added.

"However, we believe Lyft is facing an increasingly competitive rideshare landscape as of late 4Q and into 1Q," the analyst wrote. While Lyft noted pricing pressure and competition, rival Uber Technologies Inc UBER said it expects UberX prices in the U.S. to rise only marginally in 2025, he further stated.

Roth Capital Partners On Lyft

Analyst Rohit Kulkarni reiterated a Neutral rating and price target of $16.

"During 2024, LYFT has managed to report two upside quarters and two downside quarters," Kulkarni said in a note. Competitive price dynamics, which began in the latter part of the fourth quarter, are expected to impact gross bookings growth in the first quarter, he added.

"LYFT highlighted incremental and unclear headwind from the loss of Delta partnership which could weigh on 2Q GB growth," the analyst stated. While the company's fundamentals and product portfolio have improved, pricing and the end of the partnership with Delta "are somewhat negative," he added.

Needham On Lyft

Analyst Bernie McTernan reaffirmed a Hold rating on the stock.

Lyft indicated that the lower pricing dynamic that started in the last couple of weeks of December was experienced "across all markets," McTernan said. Although the decline was less steep in January, it brought the base pricing per mile for the month to the lowest level in five quarters, he added.

Prices are likely to be "lower for longer," the analyst stated. The company is likely to record "slight acceleration" in rides growth for the rest of the year, "as the Leap Day compares ease," he further wrote.

LYFT Price Action: Shares of Lyft had declined by 6.2% to $13.48 at the time of publication on Wednesday.

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