Lyft's Steady Performance In Q3 Reinforces Rating: Analyst Highlights Ride-Hailing Resilience

Piper Sandler analyst Alexander Potter maintained an Overweight rating on Lyft, Inc LYFT with a price target of $14.

LYFT shares are down 3% since reporting 3Q results on November 8. 

Revenue of $1.158 billion beat his estimate of $1.139 billion and consensus of $1.143 billion. LYFT disclosed $3.55 billion in 3Q gross bookings, averaging ~$19 per ride.

While LYFT's 3Q take rate of 33% is higher than Uber Technologies, Inc's UBER 3Q mobility take rate of 28%, the difference is mostly due to the inclusion of micro-mobility in LYFT's GB figure, as per the analyst.

Although the results beat expectations, Potter notes that investors may have been expecting slightly more generous Q4 guidance. 

LYFT's new management team continues to build investor confidence by disclosing new business metrics, including gross bookings and rides. These metrics provide increased transparency and greater comparability with other gig platforms. 

Potter still likes LYFT as a pure ride-hailing play, which will be more resilient to recessionary pressure than food delivery. 

Potter increased his estimates to reflect recent results but maintained the price target, as higher estimates are offset by a higher WACC of 13.9% (up from 13.8%) due to increased treasury yields.

Potter projects 4Q revenue and EPS of $1.22 billion and $0.08.

Price Actions: LYFT shares traded lower by 0.29% at $10.35 on the last check Wednesday.