On Thursday, KeyBanc Capital Markets maintained a Sector Weight rating on Lyft , Inc. (NASDAQ:LYFT) stock. The firm anticipates Lyft's gross bookings to reach $20.7 billion and EBITDA to stand at $658 million by 2026, which would correspond to compound annual growth rates (CAGRs) of 15% and 44%, respectively, over a three-year period. These projections suggest a slight advantage over the current consensus estimates among investors.
The firm's analysis comes as Lyft is preparing for its investor day on June 6. The event is expected to provide the company with an opportunity to present its financial targets and strategic plans to investors. KeyBanc's estimates reflect a positive outlook on Lyft's operational execution and its improved approach to capital allocation.
Despite the optimistic growth rates, KeyBanc highlighted the valuation disparity between Lyft and its competitor, Uber Technologies Inc . (NYSE:NYSE:UBER), noting Lyft's 2025 estimated enterprise value to EBITDA multiple at 11 times compared to Uber's 15 times.
The firm indicated that while Lyft's performance is on a positive trajectory, a significant revision would be required to narrow this valuation gap.
The Sector Weight rating suggests that KeyBanc views Lyft's stock as appropriately valued at its current price, given the expected financial performance and market conditions.
The firm's position remains cautious, as it awaits further evidence of Lyft's ability to enhance its valuation relative to its peers in the ridesharing industry.
Investors will likely look to Lyft's upcoming investor day for additional insights and updates on the company's long-term strategy and financial goals, which could influence the stock's performance in the market.
InvestingPro Insights
As Lyft, Inc. (NASDAQ:LYFT) gears up for its investor day, real-time data and insights from InvestingPro provide a deeper understanding of the company's financial health and market position. With a market capitalization of $6.42 billion, Lyft's financial landscape showcases some intriguing metrics. Notably, the company has a high Price / Book multiple of 13.07, reflecting investor expectations of future growth, which aligns with KeyBanc's positive growth rate projections. Lyft's revenue growth over the last twelve months as of Q1 2024 stands at 10.9%, with a more impressive quarterly surge of 27.65% in Q1 2024, indicating a robust upward trajectory in sales.
InvestingPro Tips highlight that Lyft holds more cash than debt on its balance sheet, providing a solid liquidity foundation. Additionally, analysts have revised their earnings upwards for the upcoming period, a sign of increasing confidence in Lyft's profitability. These factors could contribute to Lyft's ability to enhance its valuation relative to peers, an aspect closely watched by investors and analysts alike. For those interested in a deeper dive, there are 13 additional tips available on InvestingPro, which could further inform investment decisions. To access these insights, use coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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