On Wednesday, Roth/MKM adjusted its outlook on Lyft Inc. (NASDAQ:LYFT), reducing the price target from $19.00 to $13.00 while maintaining a Neutral rating on the stock. The revision follows Lyft's report last week which revealed weaker-than-expected second quarter bookings and a third quarter bookings forecast that fell short of market expectations.
Since the report, Lyft's shares have experienced a 12% decline. Despite this downturn, Roth/MKM's revenue estimates for the year 2025 remain unchanged. However, the firm has lowered its expectations for Lyft's 2025 EBITDA by approximately 13%.
Lyft has reiterated its 2024 projections for Bookings and Rides growth, but questions have been raised about the feasibility of the company's financial goals set earlier in June. These targets include achieving $25 billion in gross bookings, $1 billion in EBITDA, and $900 million in free cash flow (FCF) by the year 2027.
The revised price target to $13 reflects a more cautious stance on the stock, with the firm's position remaining Neutral. The update comes as Lyft continues to navigate the competitive and dynamic ride-sharing market landscape.
In other recent news, Lyft has seen notable developments in its financial forecasts and performance. DA Davidson, TD Cowen, and BMO Capital Markets have adjusted their price targets for Lyft, citing changes in the ride-hailing company's earnings forecasts and recent financial results.
DA Davidson lowered its price target from $18 to $11, while TD Cowen reduced its target from $18 to $15, and BMO Capital Markets cut its target from $19 to $13. These adjustments reflect revised EBITDA estimates and a more conservative outlook on Lyft's valuation.
Lyft reported a revenue increase in the second quarter and achieved its first-ever GAAP profitability with a net income of $5 million. The company also saw record quarterly active riders reaching 23.7 million.
The company's Media division also experienced a significant revenue boost, increasing by over 70% from the previous year.
InvestingPro Insights
As Lyft Inc. (NASDAQ:LYFT) faces market headwinds, a closer look at real-time data and insights from InvestingPro could provide investors with a clearer picture of the company's financial health and future prospects. Lyft's market capitalization stands at $4.13 billion, reflecting the scale of the company in the competitive ride-sharing industry. Despite a challenging quarter, Lyft's revenue growth over the last twelve months was 19.88%, indicating an ability to expand its revenue streams amidst the industry's dynamics.
InvestingPro Tips suggest that Lyft holds more cash than debt on its balance sheet, which could provide some financial flexibility in uncertain times. Additionally, analysts expect net income and sales growth in the current year, which might offer a glimmer of hope for investors looking for signs of recovery. However, it's worth noting that the stock has experienced significant volatility, with a price drop of over 23% in the last month alone, underscoring the uncertainties that lie ahead.
For investors seeking a more comprehensive analysis, there are over 10 additional InvestingPro Tips available, including insights into earnings revisions and profitability predictions for the year. For those looking to dive deeper into Lyft's financial metrics and analyst forecasts, these tips can be found at https://www.investing.com/pro/LYFT.
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