Lyft’s Growth Potential Amidst Competitive Challenges and Rising Operating Expenses

DBS analyst Nashrullah Putra Sulaeman has maintained their neutral stance on LYFT stock, giving a Hold rating yesterday.

Nashrullah Putra Sulaeman’s rating is based on several factors, including Lyft’s recent performance and competitive position. Lyft reported a record number of active riders and a significant revenue growth, yet it faces challenges in the North American rideshare market due to its limited scale compared to competitors like Uber. Uber’s extensive global presence and diversified business units give it a significant advantage, further highlighted by its larger market share and higher EBITDA margin.
Despite Lyft’s promising strategies, such as its partnership with DoorDash, and a projected strong EBITDA growth rate, its operating expenses have risen substantially, impacting profitability. The company’s target price reflects a discount to Uber’s valuation, acknowledging these competitive challenges. While there are opportunities for stock appreciation through increased demand and market share gains, risks such as a potential halt in the ridesharing recovery remain significant considerations in maintaining a Hold rating.

Based on the recent corporate insider activity of 85 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of LYFT in relation to earlier this year.