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On Tuesday, RBC Capital Markets reiterated its Outperform rating on Lyft Inc (NASDAQ:LYFT) with a steady price target of $21.00. Following a post-earnings discussion with Lyft’s Vice President of Investor Relations and Financial Planning & Analysis, Aurélien Nolf, RBC’s analyst highlighted the company’s performance and future outlook.
Lyft’s recent earnings results, which surpassed expectations, have led to a remarkable 33.5% increase in its share price over the past week. The company reported revenue growth of 27.3% and achieved profitability in the last twelve months. Despite this surge, RBC’s analyst believes that Lyft is trading at an attractive valuation, with a price to 2026 estimated EBITDA multiple of 8.6 times, supporting the unchanged Outperform thesis.
The analyst pointed out several key factors underpinning Lyft’s positive trajectory. First, the company is in the early stages of tapping into previously unreachable segments of the total addressable market. This expansion is driving down the average booking per ride but is expected to result in more rides and higher gross profits, with the company maintaining a healthy gross profit margin of 35.3%. InvestingPro analysis reveals 12 additional key insights about Lyft’s growth potential and market position.
Secondly, Lyft has shown sustainable ride efficiency gains, with potential for further improvements. The company’s robust pipeline of partnerships and corporate agreements is also seen as accretive, providing a buffer for the second quarter guidance against potential impacts from Delta.
Lastly, the analyst noted the growing interest in Lyft’s autonomous vehicle initiatives, particularly looking forward to the upcoming launch with May Mobility in Atlanta. This move is seen as a positive step in the company’s ongoing development of autonomous vehicle technology.
Lyft’s strategy and market position appear to be in a favorable light according to RBC Capital Markets, as the company continues to navigate the competitive landscape and innovate within the transportation industry.
In other recent news, Lyft’s first-quarter earnings report revealed a notable increase in Gross Bookings, with rides growing by 16% year-over-year. The company’s adjusted EBITDA exceeded expectations, achieving a solid 10% incremental margin on Gross Bookings with lower sales and marketing expenditures. Analysts have responded to these results with varying perspectives. Goldman Sachs upgraded Lyft’s stock rating to Buy and raised the price target to $20, citing the company’s earnings potential. Benchmark also maintained a Buy rating, highlighting Lyft’s strategic expansion and partnerships as a foundation for future growth. Meanwhile, Cantor Fitzgerald increased its price target to $14, acknowledging Lyft’s stable demand and pricing environment, but retained a Neutral rating. Raymond (NSE:RYMD) James maintained a Market Perform rating, expressing cautious optimism about Lyft’s core business execution and AV strategy. In other developments, Engine Capital withdrew its board nominations after Lyft committed to substantial share repurchases, indicating confidence in the company’s current management and strategic direction.
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