On Monday, Deutsche Bank reiterated its Hold rating on Lyft (NASDAQ:LYFT) shares, maintaining the $18.00 price target for the NASDAQ:LYFT stock. The focus is on Lyft's upcoming inaugural analyst day scheduled for next Thursday, June 6, with low expectations for a positive surprise. The stock has lagged behind the S&P 500 by 13 points since the first quarter of 2024 earnings report.
The analyst anticipates that Lyft's management will discuss several critical issues at the analyst day that could potentially act as a catalyst for the company's shares. These topics include growth in gross bookings following the fiscal year 2024, expectations for EBITDA margin expansion, long-term free cash flow conversion profiles, and further clarity on achieving GAAP profitability.
Growth guidance for gross bookings is modeled to range from a low double-digit compound annual growth rate (CAGR) for the fiscal years 2023 to 2026 to a mid-teens CAGR. A mid-teens growth guide could be well-received by the market, especially considering Uber (NYSE:UBER)'s mobility segment is expected to see mid to high teens gross bookings growth over a similar three-year outlook.
Despite maintaining the Hold rating, the analyst notes that Lyft has shown strong execution in a robust market. For a more positive outlook on Lyft, consistent execution, increased traction in membership and subscription products, and evidence of market share gains or accelerated margin expansion would be key factors. The $18.00 target price is based on a 15 times multiple of the firm's fiscal year 2024 EBITDA estimate of $363 million.
InvestingPro Insights
As Lyft gears up for its inaugural analyst day, investors and analysts alike are keenly watching the company's financial health and market performance. According to InvestingPro data, Lyft holds a market capitalization of $6.3 billion, with a notable revenue growth of 10.9% over the last twelve months as of Q1 2024. This growth is further accentuated by a quarterly revenue increase of 27.65% in Q1 2024, signaling a positive trajectory for the company's sales. Despite a challenging P/E ratio of -32.87, Lyft's gross profit margin remains robust at 32.58%, underscoring the company's ability to maintain profitability in its core operations.
Two key InvestingPro Tips highlight that Lyft holds more cash than debt on its balance sheet and that analysts are optimistic about the company's future, with net income expected to grow this year. These insights suggest a potentially strong financial position for Lyft, which could be a pivotal factor discussed during the analyst day. Additionally, with 12 analysts having revised their earnings upwards for the upcoming period, there is a consensus building around Lyft's improving financial outlook.
For investors seeking a deeper dive into Lyft's financials and future projections, InvestingPro offers more comprehensive analysis and tips. By using the coupon code PRONEWS24, readers can access these valuable insights with an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 10 more tips available on InvestingPro, subscribers can gain a thorough understanding of Lyft's investment potential as they navigate the evolving landscape of the ride-sharing industry.
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