Canaccord Genuity lowered its price target for Lyft (LYFT) to $16.00 from $19.00 while keeping a Hold rating on the ride-hailing company. The stock is trading around $14.32, off roughly 13% year-to-date and having posted a notable decline over the past three months.
The firm’s reassessment centers on the emergence of robotaxi competitors and the risk that autonomous fleets could materially change underlying economics for traditional ride-hailing operators. Canaccord highlighted three potential consequences: fare deflation, insufficient expansion in total addressable market (TAM) to offset price declines, and a reduction in platform take rates.
According to Canaccord’s analysis, the most favorable outcome for incumbent ride-hailing companies would be a substantial expansion of the TAM large enough to absorb deflationary pressures. The firm quantified a threshold it says would be necessary to offset those pressures, noting that rider cost per mile would likely need to fall below about $0.75 for TAM expansion to be the countervailing force. Canaccord expressed skepticism that such economics will materialize in the near term, forecasting that it would probably take several years and extend well past 2030 before those levels become feasible.
Canaccord also directly challenged a lower-cost assertion for robotaxis, disputing a $0.25-per-mile figure put forward by an industry executive. The firm said its own calculations do not support a $0.25-per-mile price point unless vehicles are redesigned to carry substantially more passengers, an example being a so-called "Robovan" concept that would materially increase passenger density per vehicle.
Despite these strategic concerns, Lyft’s recent operating performance includes some positive indicators. The company reported revenue growth of 14.9% over the last twelve months and posted fourth-quarter gross bookings of $5.1 billion, a rise of 19% year-over-year that matched market expectations. Lyft’s normalized revenue for the quarter was $1.76 billion, up 14% from the prior year after adjusting for a $168 million legal and regulatory reserve item. Analysts currently expect Lyft to be profitable this year, with consensus forecasts implying an EPS of $1.26 for fiscal 2025. Separately, analysis indicates the stock is trading below its Fair Value.
Market reaction after the earnings release has been mixed, with several brokerages revising targets or reiterating stances:
- Evercore ISI trimmed its price target to $21, citing a softer-than-expected outlook.
- TD Cowen reduced its target to $30, pointing to rides growth that missed expectations.
- Goldman Sachs lowered its target to $25 but maintained a Buy rating, noting record Active Riders and Gross Bookings.
- BMO Capital kept a Market Perform rating and a $23 target, observing that revenue slightly exceeded consensus.
- RBC Capital cut its target to $22, attributing the revision to competitive forces weighing on ride volumes and a deceleration in growth.
These adjustments from sell-side firms underscore a range of views on Lyft’s near-term trajectory: some analysts are focusing on improving user and booking metrics, while others are emphasizing competitive and structural threats from autonomous mobility solutions that could compress unit economics.
For investors and industry watchers, the central unknown remains how quickly robotaxi economics will improve and whether incumbents’ platforms can expand their serviceable markets enough to offset lower fares. Canaccord’s position is that the timeline for that shift is prolonged and uncertain, which underpins its more conservative valuation stance.
Note: This article presents the latest analyst actions and company metrics to inform readers about evolving views on Lyft’s outlook and competitive pressure from autonomous vehicles.