Wells Fargo has trimmed its price target on Lyft (NASDAQ:LYFT) to $18.00 from $26.00 while maintaining an Equal Weight rating on the shares, the firm said. Lyft shares are trading at $16.85, beneath Wells Fargo's new target and also below the Fair Value calculated by InvestingPro, a point that suggests the market price may not fully reflect intrinsic value despite the company's recent headwinds.
The analyst move follows Lyft's softer-than-expected ride volume performance in the fourth quarter. The company reported global rides growth of 11%, short of the mid-to-high teens guidance it had provided. That weaker volume outcome contrasts with Lyft's revenue growth, which was 14.9% over the last twelve months.
Wells Fargo analyst Ken Gawrelski described the fourth-quarter ride results as a "material miss" relative to the company's guidance, even as the broader U.S. rideshare industry expanded by roughly 14% over the period. The firm estimates that Lyft's U.S. rides rose by mid-single digits, markedly trailing market leader Uber's 17% growth rate.
Wells Fargo pointed to elevated promotional activity focused at the lower end of the market, particularly late in the quarter, as a factor in Lyft's lagging volume. According to the firm, October and November appeared consistent with mid-teens ride growth, but December showed a pronounced softening. That pattern echoes a similar dynamic the company experienced in the previous year's fourth quarter. The analyst note adds that promotional intensity eased in the first quarter of the current year.
Earnings and revenue dynamics
Lyft's reported fourth-quarter 2025 results contained a notable mix of outcomes. The company posted earnings per share of $6.72, a marked beat versus the forecast of $0.1255. Revenue, however, fell short of expectations, coming in at $1.59 billion compared with the $1.76 billion analysts had anticipated. The divergence between EPS and top-line results underscores differing drivers within the quarter's performance.
How other analysts reacted
- Piper Sandler cut its price target on Lyft to $20, citing concerns about ride volume, while retaining an Overweight rating on the stock.
- KeyBanc Capital Markets kept a Sector Weight rating, noting solid bookings and EBITDA despite guidance that landed slightly below consensus.
- Guggenheim lowered its price target to $22 and continued to carry a Buy rating, attributing the slowdown in ride growth to strategic choices made by Lyft management.
Taken together, these actions by multiple research teams reflect a period of reassessment around Lyft's near-term growth trajectory and the company's competitive responses within the rideshare market. Analysts highlighted both demand-side softness late in the quarter and management strategy as factors shaping expectations.
Market context and outlook
The downgrade by Wells Fargo and the adjustments from other firms illustrate ongoing operational and strategic uncertainties for Lyft. While the company delivered an EPS beat, weaker-than-guided ride volumes and a revenue miss have prompted analysts to recalibrate their expectations. The market response has pushed the shares below new and previously cited targets, leaving investors to weigh near-term promotional dynamics and management decisions against longer-term value signals.
Further developments in ride volumes, promotional intensity, and how Lyft translates bookings into revenue and EBITDA will likely inform subsequent analyst views and target revisions.