On Monday, Benchmark analysts upgraded Lyft (NASDAQ:LYFT) stock from Hold to Buy, setting a new price target of $20.00. The upgrade comes with a positive outlook on the company’s strategic moves and potential for growth, despite competition from industry giants.
Benchmark pointed out several factors that could drive Lyft’s performance, including the company’s decision to reduce surge pricing and expand its Price Lock platform, which is expected to improve rider metrics. Additionally, Lyft’s ongoing expansion through partnerships in both traditional and autonomous vehicle (AV) sectors is seen as a potential boost to its business metrics.
Lyft’s focus on the North American market is also viewed as an advantage, as it presents less risk and more opportunities for global expansion compared to Uber (NYSE:UBER), whose gross bookings outside of the U.S. and Canada are estimated to be three times larger than Lyft’s business within those regions.
The analyst also highlighted Lyft’s Flexdrive platform, which could position the company to be a significant player in the evolving AV market, despite acknowledging uncertainties in the economic model.
Furthermore, Lyft’s anticipated free cash flow (FCF) inflection and expected GAAP earnings per share (EPS) inflection are suggested to attract new investors, particularly when the company shifts its focus from debt repayment to returning capital to shareholders.
Benchmark’s upgrade does not factor in recent takeover rumors, which the firm believes could provide additional support to Lyft’s valuation in the long term. With a strong case for Lyft’s potential, Benchmark is confident enough to identify Lyft as one of its top ideas for 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.