DA Davidson cuts Lyft stock target to $15, maintains neutral stance

On Wednesday, DA Davidson analyst Tom White revised the price target for Lyft shares, traded on (NASDAQ:LYFT), to $15.00, down from the previous $16.00, while keeping a Neutral rating on the stock. Currently trading at $13.98, Lyft has shown significant volatility, with a 48.2% surge over the past six months despite recent pressures. The adjustment follows Lyft’s fourth-quarter earnings for 2024, which presented a complex performance with Gross Bookings slightly below expectations but still demonstrating a robust 15% increase. Ride numbers grew at an equal rate, supported by a 10% rise in Active Riders. According to InvestingPro data, the stock has maintained strong momentum despite market fluctuations.

Lyft’s fourth-quarter adjusted EBITDA surpassed the consensus, reaching $112.8 million compared to the anticipated $104 million. The company’s revenue reached $5.79 billion in the last twelve months, with a notable 31.4% growth rate. The company also reported profitability with GAAP Net Income and a Free Cash Flow of $140 million for the quarter. Looking ahead, Lyft has provided guidance for mid-teen Ride growth in the first quarter, but anticipates Gross Bookings growth to be slower at 10%-14%, which falls short of the Street’s projection of 14.8%. This tempered expectation is attributed to competitive pricing pressures that emerged late in the fourth quarter and have continued.

The analyst noted that while the first-quarter Rides growth outlook is positive, it is likely to lead to a slower increase in Gross Bookings due to market-driven pricing pressures and the impact of a Leap Year, which is expected to create a 100 basis points challenge to first-quarter performance. InvestingPro analysis indicates that Lyft maintains a strong financial health score, with particularly robust growth metrics. In light of these factors, DA Davidson has adjusted its forecasts for Lyft. The firm’s 2025 Gross Bookings prediction has been reduced by 1.1% due to the recent pricing pressures and the end of Lyft’s partnership with Delta Airlines (NYSE:DAL).

Despite the lower Gross Bookings forecast, DA Davidson has increased its 2025 adjusted EBITDA estimate for Lyft from $529.3 million to $553.5 million, acknowledging the company’s continued cost management efforts. InvestingPro analysis suggests Lyft is currently undervalued, with analysts projecting significant earnings growth for the year ahead. The new 12-month price target of $15 reflects a valuation of just under 9 times the firm’s 2025 enterprise value to EBITDA projection, which has been adjusted to account for Lyft’s slightly reduced growth outlook as it enters the 2025 calendar year. For deeper insights into Lyft’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Lyft has been the focus of multiple analyst firms. BMO Capital Markets revised Lyft’s stock target from $18 to $15 due to several factors, including lower-than-projected bookings growth and the termination of Lyft’s partnership with Delta. Despite these challenges, BMO highlighted Lyft’s investment in autonomous vehicles as a potential growth area.

On the other hand, Benchmark maintained a Buy rating and a $20 price target on Lyft’s shares, noting the company’s struggles with pricing strategies and the loss of the Delta partnership. The firm’s analyst, Daniel L. Kurnos, expressed optimism about Lyft’s growth potential and identified the company as a top growth-at-a-reasonable-price opportunity.

Cantor Fitzgerald cut Lyft’s stock target to $14 due to bookings falling slightly below forecasts, while JPMorgan reduced its target to $16 amid intensified competition in the ride-sharing industry. Both firms maintained a Neutral rating on Lyft’s shares.

Lastly, Evercore ISI reduced its Lyft stock target from $19 to $15 following lower-than-expected financial results for the fourth quarter. Despite the challenges, the firm maintained an ’In Line’ rating, suggesting that Lyft’s stock is currently valued appropriately in relation to its peers. These are the recent developments in Lyft’s financial outlook.

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