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On Thursday, TD Cowen maintained a Hold rating on Lyft (NASDAQ:LYFT) but reduced the price target from $14.00 to $12.00. According to InvestingPro data, Lyft's stock currently trades at $10.94, with analysts' targets ranging from $10 to $26. The firm's analysts pointed to a solid but decelerating growth in the first quarter Gross Bookings (GBs) and adjusted their second half of 2025 estimates due to a softening macroeconomic environment. They anticipate Lyft's first-quarter revenue to increase by 14.8% year-over-year, a slowdown from the 26.6% year-over-year growth seen in the fourth quarter of 2024. This follows Lyft's strong performance in the last twelve months, with revenue reaching $5.79 billion and a gross profit margin of 35.26%. The revised revenue estimate of $1.47 billion is slightly below the consensus.
TD Cowen forecasts Lyft's EBITDA to reach $92.1 million, representing a 55% year-over-year increase and aligning with the company's guidance of $90 million to $95 million, though slightly below the consensus of $92.5 million. Analysts expect that the upcoming earnings report will draw investor attention to rideshare trends heading into the second quarter of 2025, particularly in terms of rideshare volume, which is expected to slightly accelerate to 15% year-over-year growth due to strong rider growth.
The firm also notes that investors will likely scrutinize margin trends, especially since most insurance renewals were completed in the fourth quarter of 2024. Management has previously indicated that the incremental insurance expense would be less than that of the fourth quarter of 2023. Further commentary on the current macroeconomic conditions is also anticipated, as there is potential for a slowdown in the travel sector.
Lyft's stock has experienced a 21% decline since the company reported its fourth-quarter 2024 earnings on February 11, 2025, which contrasts with a 10% decline in the S&P 500 over the same period. As Lyft prepares to report its first-quarter 2025 results, the focus will be on rideshare volume trends and any insights into how the company is navigating the broader economic challenges.
In other recent news, Lyft has been the subject of several significant developments that may impact investor perspectives. First, BofA Securities downgraded Lyft's stock rating from Buy to Underperform, reducing the price target to $10.50. This decision was influenced by competitive pressures from autonomous vehicle technologies and concerns about Lyft's profitability. In contrast, KeyBanc Capital Markets maintained a Sector Weight rating on Lyft, indicating a neutral stance despite the involvement of activist investor Engine Capital, which holds a $50 million stake in the company.
Engine Capital has been vocal about the need for strategic changes at Lyft, including a review of its board and capital allocation strategy. Meanwhile, Lyft is reportedly in talks to acquire FreeNow, a taxi application owned by BMW (ETR:BMWG) and Mercedes, which could expand its global presence if the deal proceeds. Although neither party has confirmed the negotiations, the acquisition would align with Lyft's efforts to strengthen its competitive position. These recent developments highlight the dynamic environment in which Lyft operates, with both internal and external factors shaping its strategic direction.
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