Figma Shares Indicated To Open $105/$110
Wednesday, Lyft (NASDAQ:LYFT), currently trading at $11.01 with a market capitalization of $4.59 billion, retained its Neutral rating from BTIG, following the announcement of its acquisition of FREENOW, a European online taxi and rideshare platform. According to InvestingPro data, Lyft has demonstrated strong revenue growth of 31.39% over the last twelve months. The deal, valued at $197 million, is expected to contribute approximately seven percentage points to Lyft’s annualized gross bookings and support the company’s ambitious target of reaching around $25 billion in bookings by 2027. InvestingPro analysis suggests the company is currently undervalued, with multiple growth indicators pointing to potential upside. Subscribers can access 12 additional ProTips and comprehensive valuation metrics on the platform.
According to BTIG, while the acquisition is set to enhance Lyft’s annualized gross bookings, the takerate for FREENOW, which primarily operates as a taxi aggregator, is anticipated to be lower, potentially adding around $80 million to annualized revenue. The analyst’s initial assessment suggests that the implied purchase multiple for the deal would be approximately 2.5 times, aligning with the average multiple within BTIG’s Digital Services coverage.
The acquisition is seen as a strategic move for Lyft as it aims to expand its footprint in the European market and diversify its services. FREENOW’s platform, which aggregates taxi services, could provide Lyft with a new customer base and additional revenue streams, contributing to the company’s growth objectives.
BTIG’s commentary underscores that their estimates for Lyft are not currently under review, as the firm typically waits until acquisitions are finalized before incorporating them into their financial models. This cautious approach reflects the uncertainty that can accompany such corporate actions until they are fully executed and integrated.
The Lyft-FREENOW deal is a significant development for the ride-sharing company, as it marks a notable expansion into the European market. Lyft’s efforts to reach its booking goals by 2027 are part of the company’s broader strategy to increase market share and profitability in the competitive ride-sharing industry. With its next earnings report scheduled for April 30, investors can access detailed analysis and Fair Value estimates through InvestingPro’s comprehensive research reports, which provide deep-dive analysis of 1,400+ top US stocks.
In other recent news, Lyft has announced its acquisition of the European mobility app FreeNow for approximately $197 million in cash. This strategic move is expected to nearly double Lyft’s potential market, expanding its operations to include 11 countries across Europe, the United States, and Canada. The acquisition aligns with Lyft’s ambition to build a customer-centric mobility platform and enhance its global presence. Additionally, Oppenheimer has initiated coverage on Lyft with an Outperform rating and a price target of $15, citing Lyft’s investments in its supply chain and technology advancements. The firm highlighted Lyft’s effective cost reduction strategies, which have improved its EBITDA leverage. Meanwhile, TD Cowen maintained a Hold rating on Lyft but lowered the price target from $14 to $12, noting a deceleration in growth and a softening macroeconomic environment. The firm expects Lyft’s first-quarter revenue to increase by 14.8% year-over-year, with EBITDA projected to reach $92.1 million, aligning with company guidance but slightly below consensus. These recent developments indicate significant strategic shifts and financial projections for Lyft in the near future.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.