Engine Capital withdraws Lyft board nominees after share buyback pledge

NEW YORK - Engine Capital LP, an investment firm, has retracted its proposal to nominate candidates for Lyft Inc.’s (NASDAQ: LYFT) board of directors after discussions with the ride-hailing company led to a commitment to buy back shares. The $5.47 billion market cap company, which has shown strong profitability with earnings per share of $0.14 in the last twelve months, saw this withdrawal come ahead of its 2025 Annual Meeting of Shareholders, marking a shift in the investment firm’s approach following a series of productive conversations with Lyft’s board.

Arnaud Ajdler, the founder and portfolio manager of Engine Capital, expressed satisfaction with Lyft’s receptiveness to dialogues aimed at increasing shareholder value. He noted that Lyft’s board has taken a significant step by pledging to conduct substantial share repurchases in the upcoming quarters. According to InvestingPro data, Lyft has demonstrated strong revenue growth of 27.32% and maintains more cash than debt on its balance sheet, supporting its ability to execute the buyback program. Given these developments, Engine Capital has decided to give Lyft time to fulfill its new promises and plans to maintain a dialogue with the board concerning further measures that could benefit shareholders.

Engine Capital, known for its value-oriented and special situations investing strategy, often engages actively with companies it invests in, especially those undergoing change. The firm’s latest move to withdraw its board nominations suggests a collaborative approach with Lyft and a focus on near-term actions that could potentially enhance shareholder returns.

This development is based on a press release statement from Engine Capital. The company’s decision to pull back its nominations could be seen as a vote of confidence in Lyft’s current board and management, as they work to implement strategies that may improve the company’s financial performance and shareholder value.

In other recent news, Lyft reported its Q1 2025 earnings, revealing a mixed financial performance. The company missed both earnings per share and revenue forecasts, with EPS at $0.01, falling short of the $0.19 forecast, and revenue at $1.45 billion, missing the expected $1.47 billion. Despite these misses, Lyft achieved its strongest Q1 ever, with records in gross bookings and free cash flow, marking the 16th consecutive quarter of double-digit year-on-year growth in gross bookings. The company also expanded its driver base and entered new markets, including Europe and Canada. Analysts have shown varied reactions; Goldman Sachs upgraded Lyft’s stock rating to Buy with a target of $20, citing optimism about its earnings potential, while JPMorgan maintained a Neutral rating, raising the price target to $16. Lyft’s strategic initiatives, such as an increased share repurchase authorization to $750 million and plans to deploy $500 million towards share buybacks, have been well-received by investors. Additionally, Lyft’s focus on product innovation and improved driver supply has contributed to its growth momentum.

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