On Wednesday, Loop Capital revised its price target for Lyft (NASDAQ:LYFT) shares, increasing it to $23.00 from the previous $16.00, while maintaining a Buy rating on the stock. The adjustment comes as the firm introduces its 2026 forecast for the ride-hailing company, basing the new target on a 15X multiplier of the projected adjusted EBITDA for that year. This aligns with InvestingPro analysis, which indicates Lyft is currently undervalued, with the stock showing strong momentum, up over 33% in the past year.
The analyst at Loop Capital highlighted Lyft's recent performance, noting the third-quarter results and fourth-quarter projections show improvements in key areas such as bookings growth, cost management, and strategic positioning for autonomous vehicles (AVs).
Supporting this positive outlook, InvestingPro data shows impressive revenue growth of 25.4% over the last twelve months, with 8 analysts recently revising their earnings expectations upward. The firm anticipates that the new administration may speed up the regulatory approval process for AVs, which is seen as a favorable development for Lyft.
The report also suggests that the environment for mergers and acquisitions (M&A) may become more conducive under a post-Lina Kahn Federal Trade Commission (FTC), hinting at the potential for Lyft to become an acquisition target. This speculation is coupled with Lyft's robust free cash flow, which was reported at $641 million over the last twelve months.
Loop Capital's stance on Lyft remains positive, with an expectation of enhanced valuation support for the company's shares moving forward. The analyst reaffirmed the Buy rating, indicating confidence in Lyft's future financial performance and market position.
In other recent news, Lyft has been making significant strides in its financial performance and strategic partnerships. The company reported a 32% year-over-year revenue increase in Q3 2024, reaching a record $1.52 billion. Gross bookings were up 16% to $4.1 billion and Active Riders increased by 9% to a record 24.4 million. Despite these positive results, Lyft reported a GAAP net loss of $12.4 million, which included restructuring charges.
Lyft has been actively expanding into autonomous services through new partnerships with Mobileye, May Mobility, and Nexar. The company also launched 33 new products and features this year, including the Price Lock feature, which has seen strong adoption.
Analysts from Tigress Financial Partners, KeyBanc Capital Markets, and Susquehanna have maintained their ratings on Lyft but have adjusted their price targets and EBITDA estimates following the company's recent developments and Q3 results.
BofA Securities has raised its target for Lyft to $21 on an upbeat outlook, while Susquehanna adjusted its price target from $10 to $18 after Lyft's robust third-quarter results. These are among the recent developments for Lyft.
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