On Wednesday, TD Cowen maintained a Hold rating on shares of Lyft (NASDAQ:LYFT) but increased the stock price target to $16.00 from the previous $14.00. This adjustment follows Lyft's reported revenue for the first quarter, which surpassed estimates due to an acceleration in gross bookings. The ride-hailing company also experienced an EBITDA that exceeded expectations, in spite of higher sales and marketing and general and administrative expenses.
Lyft's guidance for the second quarter of 2024 indicates a 1.6% increase in gross bookings at the midpoint, which is in line with consensus estimates. The EBITDA guidance provided by the company also surpassed the anticipated figures.
Furthermore, Lyft has reiterated its full-year 2024 outlook for rides and EBITDA margin while improving its forecast for free cash flow. The company now expects free cash flow to be 70% of EBITDA conversion, a significant increase from the previously projected 50%.
The analyst's decision to raise the stock price target is based on these recent financial outcomes and projections. Lyft's performance after hours reflected a positive response to the news, with shares climbing by 6%. The updated stock target suggests a modest potential upside from the current trading levels, reflecting a cautious optimism about the company's financial trajectory.
Lyft's recent financial results and guidance provide a more concrete basis for evaluating the company's outlook. The raised free cash flow forecast, in particular, indicates a stronger financial position that could support ongoing operations and potential future investments.
Investors and market watchers will likely continue to monitor Lyft's performance closely, especially in regards to its ability to maintain the momentum in gross bookings and manage expenses effectively. The updated price target from TD Cowen reflects a nuanced view of the company's financial health and market position.
InvestingPro Insights
As Lyft (NASDAQ:LYFT) navigates the competitive ride-hailing landscape, real-time metrics from InvestingPro provide a snapshot of the company's financial health. With a market cap of $7.29 billion and a revenue growth of 7.53% in the last twelve months as of Q4 2023, Lyft shows a trajectory of expansion despite not being profitable during the same period. The company's stock has experienced a robust return of 94.38% over the past year, showcasing investor confidence in its growth prospects.
InvestingPro Tips highlight key factors that investors may consider. Lyft holds more cash than debt on its balance sheet, which could provide financial flexibility in strategic decision-making. Additionally, analysts predict the company will be profitable this year, aligning with Lyft's own positive guidance for 2024.
With these considerations in mind, investors can delve deeper into Lyft's financials and future outlook with InvestingPro, which offers 12 additional tips for a comprehensive analysis. To access these insights, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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