Lyft Earnings: After Uber's Lift-Off Yesterday, Lyft's Results Weren't as Inspiring

We are lowering our fair value estimate for narrow-moat Lyft to $15 from $25 after the firm reported mixed results, with in-line quarterly results offset by weak guidance for the upcoming third quarter. Driving most of our fair value revision, however, is an updated growth outlook for the firm’s gross bookings and its revenue in the near-to-medium term. We believe that while Lyft’s topline has been decelerating in recent quarters, a more pronounced deceleration could occur in 2025. We expect macro concerns in 2025, including a weakening job market, along with increased competition from Uber, will drive customers away from the firm’s platform. Further, while we view the entrance of AV, or autonomous vehicle, fleets as a potential advantage for Uber, which can build partnerships with AV firms to provide its ridesharing expertise, the same cannot be said about Lyft due to the firm’s limited scale. With the firm’s shares trading down sharply after reporting results, we continue to view Lyft as moderately undervalued relative to our updated fair value estimate.