Lyft Analyst Says 'Buy Into The Story' Despite Tesla, Waymo Competition

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Late last month, Lyft Inc (NASDAQ: LYFT) filed a lawsuit against San Francisco for overcharging its ride-hailing services by $100 million in taxes.

The stock climbed to $18 after the company reported solid third-quarter results and more evidence to "buy into the story" is likely to come from its fourth-quarter performance, according to Benchmark.

Analyst Daniel Kurnos upgraded the rating for Lyft from Hold to Buy, while establishing a new price target of $20.

The Lyft Thesis: There are indications of the company performing "particularly well" during the primetime holiday hours, while benefiting from recent partnership wins, Kurnos said in the upgrade note.

Lyft could face ongoing pressure from robotaxi leaders Tesla Inc (NASDAQ: TSLA) and Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Waymo, the analyst stated. He added, however, that Lyft could benefit from:

  • Upside to rider metrics from the company's decision to reduce surge pricing while continuing with its Price Lock platform expansion
  • Lyft expanding via partnerships, "both on the traditional and AV fronts, with prior partnerships also likely to produce near-term upside to metrics"
  • Lyft's domestic focus and lower share means they both have less at risk in North America and everything to play for globally
  • Lyft's Flexdrive platform seems suited to allow the company to be "an AV participant regardless of how the market evolves"
"Lyft's FCF inflection and forthcoming GAAP EPS inflection could usher in new potential shareholders, especially when (not if) Lyft turns its focus from debt paydown to capital returns," Kurnos further wrote.

LYFT Price Action: Shares of Lyft were up 2.59% to $14.64 at the time of publication Monday.