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Investing.com - Oppenheimer raised its price target on Lyft (NASDAQ:LYFT) to $20.00 from $17.00 on Tuesday, while maintaining an Outperform rating on the rideshare company’s stock. The upgrade comes as Lyft’s stock has gained over 20% in the past six months, with the company achieving profitability and showing strong revenue growth of 27% year-over-year. According to InvestingPro analysis, Lyft currently appears undervalued relative to its Fair Value.
The investment firm cited diminished concerns about robotaxi competition as a key factor in its decision, noting that Lyft has moved past what it called "near/medium-term robotaxi headwind," potentially setting up multiple expansion while estimates remain conservative. With a market capitalization of $6.92 billion and improving fundamentals, InvestingPro data shows Lyft holds more cash than debt on its balance sheet, suggesting financial stability.
Oppenheimer specifically referenced Tesla (NASDAQ:TSLA)’s limited robotaxi launch in Austin, which it described as "disappointing investors," with passengers reporting safety concerns that have "firmly halted" fears that autonomous vehicles would undermine rideshare marketplace demand.
The firm also highlighted that consumer demand and the competitive landscape for Lyft have remained stable since the company’s last earnings report, suggesting a "healthy" second quarter and second half backdrop for the rideshare industry.
Oppenheimer views current consensus estimates as conservative, noting that analysts project a 12% gross bookings compound annual growth rate through 2027, which falls below Lyft’s own 15% target.
In other recent news, Lyft has been the focus of several key developments. Canaccord Genuity downgraded Lyft’s stock rating from Buy to Hold, citing concerns about the company’s position in the evolving autonomous vehicle market. This downgrade comes amid uncertainty about Lyft’s future role as autonomous vehicle technology advances. Meanwhile, New York City has finalized new minimum-pay rules for rideshare drivers, implementing a 5% increase, which affects both Lyft and Uber (NYSE:UBER). Additionally, Bernstein maintained its Market Perform rating for Lyft, noting insights from its Flexdrive operations, which manage vehicle rentals for drivers.
KeyBanc Capital Markets also maintained its Sector Weight rating for Lyft, highlighting the company’s progress toward its 2027 financial targets. The firm noted that while Lyft is performing well in areas like capital allocation and free cash flow, it may fall short in gross bookings growth. In another development, DoubleVerify (NYSE:DV) Holdings announced a partnership with Lyft to provide media verification capabilities across Lyft’s advertising platform. This collaboration aims to enhance transparency and trust for advertisers using Lyft’s platform. These recent developments provide a comprehensive view of Lyft’s current position and challenges in the market.
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