Canaccord maintains Lyft stock Buy rating, $22 price target

On Wednesday, Canaccord Genuity reaffirmed its Buy rating and $22.00 price target for Lyft (NASDAQ:LYFT) shares, following the company’s fourth-quarter earnings report. Lyft’s performance showcased a mix of achievements and challenges, with gross bookings falling short of Canaccord’s expectations, but revenue aligning and adjusted EBITDA surpassing their estimates. Year-over-year growth was evident as total rides and gross bookings both saw approximately a 15% increase, driven by strong engagement from riders and drivers alike. According to InvestingPro data, Lyft’s revenue growth reached 25.4% in the last twelve months, with analysts expecting continued sales growth this year. The stock currently appears undervalued based on InvestingPro’s Fair Value analysis.

Lyft’s efforts to enhance user experience through platform innovations were highlighted, particularly noting the success of their Price Lock feature. This feature has shown positive retention, with 70% of users who opt for Price Lock continuing to purchase passes in the following months. Additionally, Lyft has improved price reliability by reducing Prime Time ride costs over the year. InvestingPro subscribers have access to 8 additional exclusive tips about Lyft’s business model and growth prospects.

The ridesharing company also demonstrated financial resilience, ending the quarter with $760 million in cash and generating $140 million in free cash flow. In a move that signals confidence in its financial position, Lyft’s board has authorized a $500 million share buyback program.

Despite the positive aspects of the report, Lyft provided guidance for the first quarter of 2025 that was slightly below market consensus. The company acknowledged the pricing pressure within the industry that became apparent towards the end of the fourth quarter and has continued into the first quarter. Nonetheless, Lyft remains committed to achieving the long-term goals it set during its investor day in June.

In other recent news, RBC Capital Markets has adjusted its growth outlook for Upwork (NASDAQ:UPWK), leading to a slight reduction in the company’s Gross Services Volume (GSV) estimates for 2025. This adjustment reflects a more measured view of the company’s growth trajectory. Meanwhile, Lyft has seen some significant developments. BofA Securities has increased Lyft’s stock price target from $19 to $21, maintaining a Buy rating. This adjustment comes after Lyft announced its partnership with Mobileye and Marubeni Corporation, with plans to deploy a fleet of autonomous vehicles on the Lyft platform in Dallas by 2026.

In addition, Lyft is taking strides in the autonomous vehicle market and plans to introduce autonomous robotaxis in Dallas by 2026, utilizing technology from Mobileye. This move underscores Lyft’s commitment to autonomous technology. Furthermore, Wolfe Research has maintained a Peerperform rating for Lyft as the company approaches its fourth-quarter earnings report.

Lastly, Lyft and AI firm Anthropic have partnered to develop new products aimed at improving the rideshare experience. The collaboration’s initial phase has already seen significant results, with customer service resolution time reportedly reduced by 87%. These are recent developments that investors should be aware of.

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