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On Thursday, Tigress Financial Partners maintained a Buy rating on Lyft (NASDAQ:LYFT) and increased the price target to $26.00 from a previous target. The firm cited Lyft's strong position to capitalize on the growing Transportation-as-a-Service (TaaS) adoption, continuous product and service innovations, and strategic partnerships that are expected to drive revenue and cash flow growth, leading to profitability and further advances in share price.
Lyft reported a significant year-over-year revenue increase of 32% in Q3 2024, reaching a record $1.52 billion. The company also saw a rise in Active Riders by 9% to a record 24.4 million and a 16% increase in Rides to a record 217 million. Gross bookings were up 16% to $4.1 billion. These metrics underscore the company's robust performance and escalating user engagement.
The ride-sharing company has been actively expanding into autonomous services through new partnerships with Mobileye, May Mobility, and Nexar. These collaborations aim to offer autonomous vehicle rides to Lyft users. Additionally, Lyft has teamed up with DoorDash (NASDAQ:DASH) to provide exclusive benefits to Lyft Riders who link their DashPass accounts, further integrating its services with the broader transportation and delivery ecosystem.
Lyft has launched 33 new products and features this year, including the Price Lock feature, which has seen strong adoption with nearly half of the rides from Monday to Friday utilizing this option. The company is also focusing on enhancements based on feedback from early users of Price Lock. Initiatives aimed at improving the experience for Drivers have also been introduced, such as increased earnings for longer rides, estimated dollar-per-hour rates for each ride, and matching electric vehicle Drivers with rides that fit their battery range.
The company's Lyft Urban Solutions, which includes bike and scooter sharing programs, is expanding Lyft's transportation offerings and reaching more customers. These innovations and marketing efforts are accelerating growth and market share gains as Lyft continues to expand its travel ecosystem through partnerships with other service providers. Tigress Financial Partners believes there is significant upside potential for Lyft shares, with the new price target representing a potential return of over 50% from current levels.
In other recent news, Lyft has showcased a strong performance in its third-quarter earnings. The company reported a year-over-year gross bookings increase of 16%, surpassing $4.1 billion, and revenue jumped significantly, exceeding $1.5 billion. Despite these positive results, Lyft reported a GAAP net loss of $12.4 million, which included restructuring charges.
Furthermore, the company's active riders grew by 9%, and ride frequency increased by 6%. Lyft has also introduced 33 new products and features and is preparing to enhance its service offerings through partnerships with Mobileye, Nexar, and May Mobility for the integration of autonomous vehicles.
KeyBanc Capital Markets maintained its Sector Weight rating on Lyft, reflecting a cautious but optimistic outlook on the company's financial health. The firm has increased its EBITDA estimates for Lyft by 7% for 2024, and by 3% for both 2025 and 2026. However, KeyBanc's stance on Lyft's stock remains unchanged due to a lack of significant future catalysts that could drive the stock higher.
Susquehanna also maintained a Neutral rating on Lyft shares but increased the price target from $10 to $18 after Lyft's robust third-quarter results. The firm believes that the current risk/reward balance for Lyft's stock does not warrant a rating change. The company's revised full-year outlook expects free cash flow to exceed $650 million.
InvestingPro Insights
Lyft's recent performance and strategic initiatives align well with several key metrics and insights from InvestingPro. The company's market cap stands at $6.89 billion, reflecting its significant presence in the ride-sharing industry. Notably, Lyft's revenue growth has been impressive, with a 25.41% increase over the last twelve months and a robust 31.54% growth in the most recent quarter. These figures support the article's mention of Lyft's strong 32% year-over-year revenue increase in Q3 2024.
InvestingPro Tips highlight that analysts expect Lyft's sales to grow this year, which is consistent with the company's record-breaking revenue and user engagement metrics reported in the article. Additionally, the tip indicating that analysts predict Lyft will be profitable this year aligns with Tigress Financial Partners' optimistic outlook on the company's path to profitability.
It's worth noting that Lyft's stock has shown a strong return of 61.56% over the past year, reflecting investor confidence in the company's strategic direction and growth potential. This performance supports the article's emphasis on Lyft's expanding services and partnerships, which are expected to drive future growth.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for Lyft, providing a deeper understanding of the company's financial health and market position.
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