Lyft (NASDAQ:LYFT) stock gained more than 1% yesterday after the company announced its long-term targets at its Investor Day conference. LYFT expects gross bookings to increase at a CAGR of about 15% through 2027. Furthermore, the company anticipates that its advertising business will expand eight-fold in the next three years.
In addition, Lyft expects an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of about 4% by 2027. It should be noted that the company reported an adjusted EBITDA of 1.6% and a 14% year-over-year increase in gross bookings in 2023.
Simultaneously, Lyft reaffirmed guidance for the current year. It continues to expect the total number of rides to grow in the mid-teens and an adjusted EBITDA margin of 2.1% in 2024.
Hedge Funds are Bullish on LYFT Stock
The company’s strategic efforts to expand its advertising business and focus on innovation bode well for long-term growth. Interestingly, the hedge fund managers seem to be confident about Lyft stock.
Hedge funds increased their holdings in the stock by 3.5 million shares in the past three months. As a result, they have a Very Positive confidence signal.
Is Lyft Stock a Buy Now?
Despite the company’s growth initiatives, intense competition in the ride-sharing market, especially from Uber (UBER), keeps Wall Street analysts sidelined on LYFT stock. It has a Hold consensus rating based on four Buy, 21 Hold, and one Sell recommendations.
After a 13% decline in share price over the past three months, the analysts’ average price target on Lyft stock of $18.98 implies a 21% upside potential.
