TD Cowen has reduced its price target on Lyft (NASDAQ:LYFT) to $30.00 from $32.00 while retaining a Buy rating on the shares. The revised target sits below an analyst high target of $32 but remains above InvestingPro's calculated Fair Value, indicating the firm still sees upside relative to that valuation metric.
The adjustment follows Lyft's fourth-quarter results, which combined robust gross bookings and positive EBITDA performance with a rides growth rate that fell short of expectations. Lyft reported rides growth of 11% year-over-year in the quarter, missing TD Cowen's 17% estimate. The company's last twelve months EBITDA was reported at $132.41 million, while revenue expanded 14.9% year-over-year.
TD Cowen noted that Lyft's emphasis on driving profitable demand contributed to the weaker rides growth during the period. Excluding one-time revenue items, the company's fourth-quarter gross bookings and revenue aligned with consensus expectations. InvestingPro data cited by analysts also shows Lyft produced a diluted EPS of $0.36 over the last twelve months, and the analyst community projects net income growth for the company this year.
Looking toward the near term, Lyft's outlook for first-quarter gross bookings came in bracketed around estimates, and its EBITDA guidance was consistent with expectations at the high end of the range. Management reiterated its 2027 gross bookings and EBITDA targets, which TD Cowen notes are above current consensus projections.
Market reaction was immediate: Lyft shares declined 16% in after-hours trading following the results and accompanying commentary, according to TD Cowen's report.
Lyft's quarterly report has led several other brokerages to update their views and price targets.
- Goldman Sachs lowered its price target to $25 while maintaining a Buy rating, citing record figures for Active Riders and Gross Bookings.
- BMO Capital kept a Market Perform rating and a $23 price target, noting bookings met expectations and revenue slightly exceeded consensus.
- RBC Capital cut its target to $22, pointing to ride volume challenges and competitive pressure from Uber despite bookings meeting expectations.
- Morgan Stanley reduced its target to $17 and maintained an Equalweight rating, expressing concerns about Lyft's growth trajectory.
- Wells Fargo trimmed its price target to $18, highlighting underperformance in ride volumes that grew 11% versus guidance calling for mid-to-high teens growth.
Collectively, these downward revisions reflect the market's reassessment of Lyft's near-term volume momentum and the competitive dynamics in the rideshare market. While several firms point to strong booking metrics or record-level active rider figures, the consistent theme among downgrades and target cuts is caution around ride volume growth and the company's ability to accelerate that metric in the near term.
Analysts continue to monitor Lyft's trade-offs between pursuing profitable demand and expanding ride volumes. Management's reaffirmation of longer-term targets for 2027 gives some visibility into strategic objectives, but near-term guidance and the latest quarter's ride growth shortfall are driving revaluations across brokerage coverage.
Investors and market participants will likely weigh Lyft's profitability metrics, bookings trends, and management guidance alongside competitive pressures as they reassess expectations for earnings and valuation.