Lyft (LYFT): Assessing Valuation After Analyst Upgrades and New Growth Initiatives Drive Investor Optimism

Lyft (LYFT) shares gained ground following upbeat earnings reports from tech giants, which boosted overall market sentiment. Ongoing profitability and expansion efforts appear to add to the renewed interest among investors.

See our latest analysis for Lyft.

Lyft’s share price has rebounded sharply in the past quarter, climbing over 41% in the last 90 days and pushing its year-to-date gain to nearly 50%. This momentum comes despite a recent pullback, as investors have grown more optimistic about the company’s consistent profitability, fresh loyalty programs, and efforts to win new riders. With a total shareholder return of 50.7% over the last year, the stock’s turnaround story is clearly building strength.

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With shares already up close to 50% this year as optimism grows about Lyft’s turnaround, the central question for investors is whether the strong gains have left the stock undervalued or if future growth is already priced in.

Most Popular Narrative: Fairly Valued

The narrative consensus sees Lyft’s fair value sitting just above the latest closing price, suggesting the current rally reflects broader market optimism but not much of a value gap for new investors.

"Expansion into urban markets, innovation in autonomous vehicles, and global partnerships are set to drive sustained revenue growth and improve long-term margins. Enhanced platform features, disciplined operations, and European market integration are expected to boost user retention and accelerate international revenue opportunities."

Read the complete narrative.

Curious about the lofty expectations baked into Lyft’s current price? The narrative’s baseline is bold. It projects dramatic earnings expansion, margin improvements, and future valuations often reserved for tech juggernauts. What numbers and assumptions are powering this target? Unlock the full story to discover how the details stack up.

Result: Fair Value of $20.18 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition and future regulatory shifts could still challenge Lyft’s growth outlook and put pressure on the company’s ability to sustain margin gains.

Find out about the key risks to this Lyft narrative.

Another View: What Does the SWS DCF Model Say?

While analysts see Lyft as fairly valued based on their earnings assumptions, our DCF model offers a different perspective. It suggests the stock is actually trading about 28% below its estimated fair value. This could indicate untapped value, or it may reflect higher uncertainty in longer-term projections.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Lyft for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 842 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Lyft Narrative

If you see things differently or want to dive into your own analysis, creating a personalized Lyft narrative is quick and straightforward. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Lyft.

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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.

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