Bernstein lowers Lyft stock price target to $16 on growth concerns

Investing.com - Bernstein SocGen Group has lowered its price target on Lyft (NASDAQ:LYFT) to $16.00 from $18.00 while maintaining a Market Perform rating on the rideshare company’s stock. With Lyft’s current market cap of $5.84 billion and stock trading at $14.21, InvestingPro analysis suggests the stock is currently undervalued.

The price target reduction follows Lyft’s second-quarter performance, which showed 12% Gross Bookings growth and 14% Rides growth - figures that fell short of Bernstein’s expectations.

Bernstein noted that while Lyft is seeing expansion in both Active Riders and usage frequency, the company’s third-quarter guidance suggests continued organic deceleration at the midpoint of the forecast range.

The firm acknowledged that Lyft’s FREENOW acquisition helps return growth rates to the company’s targeted mid-teens level, but indicated investors will likely look beyond this inorganic growth boost.

Bernstein expressed preference for Uber (NYSE:UBER), noting that Lyft’s larger competitor is growing in the high-teens, projecting acceleration in the U.S. market for the third quarter, and replicating some of Lyft’s recent product innovations.

In other recent news, Lyft reported its second-quarter earnings, revealing mixed results. The company’s gross bookings and revenue slightly missed analysts’ expectations, but its adjusted EBITDA performance exceeded forecasts, according to Cantor Fitzgerald and BMO Capital. Despite these mixed outcomes, Lyft’s third-quarter guidance appears strong, incorporating two months of operations from the recent Freenow acquisition. Analyst firms have varied in their responses; DA Davidson lowered its price target to $14.20 while maintaining a Neutral rating, citing the mixed quarterly performance. Conversely, TD Cowen raised its price target to $22, highlighting record active riders and rides, with EBITDA surpassing consensus by 4.1%. Benchmark reiterated its Buy rating with a $20 price target, noting uncertainty around the Freenow acquisition’s impact on estimates. Meanwhile, BMO Capital adjusted its price target to $16, acknowledging the company’s better-than-expected EBITDA. These developments reflect a range of analyst perspectives on Lyft’s current financial standing and future potential.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.