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Investing.com - RBC Capital has reiterated an Outperform rating on Lyft (NASDAQ:LYFT) with a price target of $21.00 following investor meetings with the company’s CEO and VP of FP&A/IR.
The investment firm remains constructive on the stock, highlighting several "shots on goal" that could drive durable growth in Lyft’s core ride-hailing business. This optimism is supported by the company’s robust revenue growth of nearly 20% in the last twelve months and analysts’ expectations of continued profitability this year.
RBC Capital notes that Lyft’s ability to address autonomous vehicles has "greatly expanded" through its Freenow acquisition, which also supports the company’s international expansion plans.
The firm points to Lyft’s margin leverage and strong cash flow as factors enabling increased capital returns to shareholders, suggesting the current buyback program may be "too low" given the company’s valuation.
According to RBC Capital, Lyft currently trades at 8.5 times EV to estimated 2026 EBITDA and 5.7 times the company’s 2027 EBITDA target, which the firm views as an "attractive valuation."
In other recent news, Lyft has announced significant changes in its leadership structure as co-founders Logan Green and John Zimmer will step down from the company’s board of directors on August 14, 2025. This move completes a two-year leadership transition that began with the hiring of CEO David Risher. Alongside their departure, the co-founders will convert their Class B shares to Class A shares, eliminating the dual-class share structure and ensuring equal voting rights for all shareholders. This conversion will leave them with approximately 9.69 million shares of Lyft Class A common stock.
In terms of financial outlook, Lyft expects third-quarter gross bookings to range between $4.65 billion and $4.80 billion, marking a 15% year-over-year growth at the midpoint, which is 3% higher than analyst estimates. Analysts have weighed in on these developments, with TD Cowen reiterating a Buy rating and a $22.00 price target, while RBC Capital continues to rate Lyft as Outperform with a $21.00 price target. On the other hand, Susquehanna has lowered its price target to $14.00, maintaining a Neutral rating, partly due to concerns about European expansion. Despite investor skepticism, Lyft’s management remains confident about the company’s growth prospects.
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