Analysts Expect Breakeven For Lyft, Inc. (NASDAQ:LYFT) Before Long

With the business potentially at an important milestone, we thought we'd take a closer look at Lyft, Inc.'s (NASDAQ:LYFT) future prospects. Lyft, Inc. operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada. The US$6.3b market-cap company posted a loss in its most recent financial year of US$340m and a latest trailing-twelve-month loss of US$184m shrinking the gap between loss and breakeven. Many investors are wondering about the rate at which Lyft will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Lyft

Lyft is bordering on breakeven, according to the 39 American Transportation analysts. They expect the company to post a final loss in 2024, before turning a profit of US$14m in 2025. So, the company is predicted to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Given this is a high-level overview, we won’t go into details of Lyft's upcoming projects, though, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Lyft is its debt-to-equity ratio of 198%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Lyft to cover in one brief article, but the key fundamentals for the company can all be found in one place – Lyft's company page on Simply Wall St. We've also put together a list of important factors you should further examine:

1. Valuation: What is Lyft worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Lyft is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lyft’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.