Lyft Is Executing Well But Analysts Caution About Uber And Waymo Competition

Lyft LYFT stock was trading higher on Friday after the company reported better-than-expected first-quarter results and announced a $750 million share buyback plan on Thursday.

Quarterly revenue was $1.45 billion, which missed the Street estimate of $1.47 billion. Lyft reported quarterly earnings of one cent per share, which beat the analyst consensus estimate of one cent in losses.

Also Read: Lyft Stock Downgraded On Autonomous Vehicle Risk From Waymo, Tesla Competition

Needham analyst Bernie McTernan reiterated Lyft with a Hold rating.
Goldman Sachs analyst Eric Sheridan upgraded the stock rating from Neutral to Buy and increased the price forecast to $20 (from $19).

Needham: Lyft is demonstrating strong operational momentum, achieving all-time first-quarter records across key metrics, including active riders, rides, gross bookings, adjusted EBITDA, and free cash flow.

This growth reflects the health of its marketplace, with improving rider frequency, record driver hours, and continued gains in ETA performance, which has improved for 13 consecutive quarters.

Lyft remains focused on innovating, broadening its market reach, and deepening engagement on both sides of the platform. The launch of Lyft Silver aims to capture the growing 65+ demographic, a segment historically underpenetrated in rideshare.

At the same time, the AI-powered Earnings Assistant tool is designed to improve driver productivity and loyalty. Internationally, the planned acquisition of FREENOW positions Lyft to nearly 2 times its TAM by adding a presence in 9 European countries, bringing in an estimated 1 billion euros in gross bookings. In parallel, the company’s move into autonomous vehicles could help drive long-term efficiency, scale, and margin expansion.

Despite strong top-line and volume growth, gross bookings growth (+13%) is trailing ride growth (+16%), driven by a negative mix shift, and McTernan noted pricing competition with Uber Technologies, Inc UBER.

Management stated that pricing remains below fourth-quarter levels due to competitive pressure and affordability-focused initiatives like Price Lock, which, while supporting retention, impacts average revenue per ride and unit economics.

McTernan projected second-quarter revenue of $1.54 billion and EPS of $0.07.

Goldman Sachs: In its quarterly earnings report, Lyft framed a few key themes, including continued momentum with double-digit Gross Bookings growth led by rides, adjusted EBITDA once again exceeding the high end of the guide, and increased share repurchase authorization.

Sheridan stated that the opportunity is created by investors’ concern about the bridge between current growth levels and the company’s growth target laid out at its 2024 Investor Day, fears around potential disruption from Waymo and Uber’s autonomous vehicles, and debates around pricing.

Sheridan remarked that those concerns were more than already discounted in the stock. While achieving the Investor Day targets will likely be a key determinant of sentiment and valuation levels, his estimates do not reflect the announced acquisition of FREENOW in Europe.

He stated that the AV ridesharing landscape remains very early and that Lyft has a vital role in the broader hybrid/AV ecosystem. The analyst noted lower cost inflation and more moderate pricing trends as a longer-term positive.

Also, execution has been solid at Lyft in recent quarters, and it is said that the North American ridesharing duopoly industry structure supports rational competitive behavior in the years ahead.

Sheridan projected second-quarter revenue of $1.59 billion and EPS of $0.06.

Price Action: LYFT stock is up 23% at $15.98 at last check on Friday.

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