On Friday, BTIG maintained a Neutral rating on Lyft (NASDAQ:LYFT) stock, without altering the previous price target. The firm's stance comes after reviewing current quarter trends and the recent investor day where Lyft did not provide an update on its second-quarter guidance.
BTIG's analysis, based on a US consumer panel, suggests that Lyft is experiencing a deceleration in sales growth when compared to the previous year, which featured pricing rationalization.
Lyft had reduced fares in March 2023, which led to an increase in rides in the subsequent months. However, against this tougher comparison, quarter-to-date (QTD) sales growth appears to be moderating.
Despite this, the trend aligns with Lyft's second-quarter bookings growth forecast of 16-19%, which is consistent with the first quarter's growth of 21%. Additionally, Lyft's market share remains stable at approximately 27% of rides.
The analysis also highlighted that Lyft's fares are now roughly 7% lower than those of its competitor Uber (NASDAQ:NYSE:UBER), which carries a Buy rating and a $90 price target. This is a change from the mid-teens premium Lyft charged before the fare reduction in March 2023. BTIG notes an improvement in Lyft's fundamentals, as the company is now on a more competitive footing.
However, ongoing regulatory risks, particularly the Proposition 22 ruling, along with news related to autonomous vehicles, are expected to continue affecting investor sentiment towards Lyft. BTIG's commentary reflects a cautious optimism about Lyft's current performance and market position, tempered by external factors that could impact the company's outlook.
InvestingPro Insights
As Lyft navigates market dynamics and investor sentiment, real-time data from InvestingPro provides additional context to the current financial landscape of the company. With a market capitalization of $5.55 billion, Lyft is a notable player in the ride-sharing industry. Despite the company not being profitable over the last twelve months, analysts have revised their earnings upwards for the upcoming period, indicating a potential shift in financial performance. Moreover, Lyft's revenue has experienced a growth of 10.9% in the last twelve months as of Q1 2023, with a significant quarterly increase of 27.65% in Q1 2023, reflecting a robust demand for its services.
InvestingPro Tips reveal that Lyft holds more cash than debt on its balance sheet, suggesting a solid liquidity position. Additionally, analysts predict the company will be profitable this year, providing a positive outlook for potential investors. It's worth noting that Lyft's stock price movements have been quite volatile, which could present both risks and opportunities for traders. For those interested in deeper insights, there are 11 additional InvestingPro Tips available, which can be accessed through a subscription. To enhance your investment research, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.