Lyft (LYFT) now looks more compelling to investors after Tesla’s (TSLA) subdued robotaxi launch in Austin because the latter’s relatively weak debut eases worries about the potential for disruption in the ride-hailing industry by robotaxis. The soft launch, according to analysts at Oppenheimer, might just give Lyft some room to catch up with rival Uber (UBER) and even pursue “meaningful EBITDA margin expansion” in chasing its own robotaxi objectives.

Other than Tesla’s high-profile blunder, the broader ride-hailing industry landscape remains healthy, catalyzed by ongoing demand and the ongoing shift in customer purchasing behaviors with increasing costs of auto ownership. Coupled with record-breaking Q1 2025 financials from Lyft and planned expansion in Europe, the stock offers investors the opportunity for tactical entry as the company scales growth with the potential for improving profitability.

About Lyft Stock

Based in San Francisco, California, Lyft (LYFT) is one of the major ride-hailing platforms in the United States, with multimodal transport modes such as scooters and bicycles. The company is worth around $6.5 billion.

Lyft shares are up 19% in the year to date, and in an even more encouraging sign, are up more than 40% in the past three months. 

From a valuation standpoint, Lyft’s forward price-earnings ratio is around 66.7x and its price-sales multiple is 1.19x, figures that reflect investor excitement about its return to normalized profitability. Although the price-earnings ratio is high, the company’s widening profit margins and near $1 billion in trailing 12 month cash flow generation warrant a premium multiple. 

Lyft Beats Earnings Estimates

Lyft posted its strongest first quarter on record, with Q1 2025 gross bookings of $4.2 billion, 13% more than the prior year, and revenue growth of 14% $1.5 billion. The company swung to net income of $2.6 million from last year’s loss of $31.5 million in the same period. Adjusted EBITDA grew to $106.5 million with maargins expanding to 2.6% of gross bookings. Free cash flow more than doubled to $280.7 million, backing an increase in Lyft’s share repurchase authorization to $750 million.

Management expects Q2 rides growth in mid-teens, gross bookings of $4.41 billion to $4.57 billion, and adjusted EBITDA up to $130 million, showing continued momentum and cost management.

New product releases such as Lyft Silver for elderly riders and early AI-powered solutions for drivers should support its growth and productivity in futures quarters. 

What Do Analysts Expect for Lyft Stock?

Analysts have a consensus “Hold” rating on Lyft stock. Oppenheimer revised its price target upward by $3 to $20, indicating potential gains of nearly 25% from recent levels.

Overall, the mean price target for Lyft stock is $17.20 per share, implying roughly 12% upside potential. The range of price targets is very large, from the high end at $28 to the low end at $10, and accounts for persistent skepticism about longer-term robotaxi competition and execution risk in the company’s expansion in overseas markets.