Benchmark maintains Lyft stock Buy rating, $20 target post-earnings

On Friday, Benchmark analyst Daniel L. Kurnos reiterated a Buy rating and a $20.00 price target on Lyft shares, traded on (NASDAQ:LYFT). Currently trading at $16.06, with a market capitalization of $6.7 billion, InvestingPro analysis suggests the stock is undervalued. The reaffirmation came despite a slight miss in headline revenue, with the company’s second-quarter rides growth and gross bookings expected to surpass analyst expectations. Kurnos highlighted several positive aspects of Lyft’s recent performance and strategic moves that suggest potential for future growth.

According to Kurnos, Lyft’s current expansion into Canada and lower-density U.S. markets is just beginning, indicating untapped potential. With impressive revenue growth of 27.3% in the last twelve months and a healthy gross profit margin of 35.3%, the company’s expansion strategy appears to be paying off. Furthermore, partnerships, such as the one with DoorDash (NASDAQ:DASH), are showing favorable results, and the recent acquisition of FREENOW could pave the way for global deals and international expansion of existing collaborations.

The analyst also pointed out Lyft’s nascent taxi offering, which has been bolstered by the FREENOW acquisition and a trial in St. Louis, as a development that significantly broadens the company’s total addressable market (TAM). In addition, Lyft is in the early stages of developing its advertising business, which could benefit from the international media spend through FREENOW.

Lyft’s confidence in its business and valuation was underscored by the increased and accelerated share repurchase authorization announced alongside its results. Kurnos acknowledges that while the path ahead may be uneven, Lyft remains one of Benchmark’s top recommendations.

The analyst’s commentary suggests that Lyft’s strategic initiatives and recent performance indicators provide a solid foundation for the company’s future growth, reinforcing the Buy rating and $20.00 price target. InvestingPro data reveals additional insights, including that Lyft holds more cash than debt on its balance sheet and is expected to grow its net income this year. For deeper analysis and 11 more exclusive ProTips, including detailed valuation metrics and growth projections, explore Lyft’s comprehensive Pro Research Report, available with an InvestingPro subscription.

In other recent news, Lyft’s Q1 2025 earnings report showed a mixed financial performance, as the company fell short of earnings per share (EPS) and revenue forecasts, missing EPS by $0.18 and revenue by $20 million. Despite this, Lyft achieved record levels in gross bookings and free cash flow, marking its strongest first quarter to date. The company also announced an increase in its share repurchase authorization to $750 million, with plans to deploy $500 million towards buybacks over the next year.

Analyst firms have responded to these developments with varied assessments. Goldman Sachs upgraded Lyft’s stock rating from Neutral to Buy, raising the price target to $20, while JPMorgan increased its price target to $16 but maintained a Neutral rating. Cantor Fitzgerald also raised its price target for Lyft to $14, citing stable demand and pricing.

Additionally, Engine Capital withdrew its board nominees following Lyft’s commitment to substantial share repurchases, signaling confidence in the company’s strategy. Lyft’s strategic initiatives, including expanding its driver base and entering new markets, have been well-received, contributing to a positive investor sentiment despite the earnings miss.

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