Proactive Investors - Lyft Inc (NASDAQ:LYFT) has been upgraded by analysts at the Bank of America (NYSE:BAC) following its inaugural Investor Day event where it projected strong growth across bookings, earnings, and free cash flow ahead of Wall Street analysts’ estimates.
The analysts upped their rating on the stock to ‘Buy’ and awarded Lyft a price objective of $20.
Shares of Lyft traded at about $15.80 on Friday morning.
At its Investor Day event, Lyft said it is targeting bookings of $25 billion by the end of 2027, 11% above Street estimates.
It also projected $1 billion in earnings before interest, taxes, depreciation and amortization (EBITDA), $250 million above estimates, and $900 million in free cash flow, $300 million above expectations.
The analysts noted that Lyft’s outlook suggests a limited increase in a competitive industry. Its projection of a 15% compound annual growth rate for bookings is in line with rival Uber Technologies Inc (NYSE:NYSE:UBER, ETR:UT8)'s forecast of mid-to-high teens growth.
“4% EBITDA margin on bookings translates to 7% incrementals, in-line with Uber and suggesting unchanged competitive intensity versus a focus on higher growth,” they wrote.
Further, they highlighted that Lyft expects rapid growth in its Media and advertising business, up from $50 million to $400 million from 2024 to 2027.
Lyft’s management noted the increased importance of first-party data given future cookie depreciation, the analysts noted.
“These targets weren't overwhelming beats, but we see upside ahead with greater efficiency, mobility tailwinds, and West Coast recovery driving near-term beats,” the analysts wrote.
“Lyft could also see outsize multiple expansion given lower rates. We like the greater focus on fixed cost savings, share count, and Media growth, making discounted valuation at 0.9x 2025 year-end revenues an attractive entry point.”