Lyft Analyst Says 'Buy Into The Story' Despite Tesla, Waymo Competition (UPDATED)

Editor's Note: This article has been updated to emphasize Benchmark's Monday analyst upgrade.

Lyft Inc. (NASDAQ:LYFT) received an upgrade Monday from Benchmark analyst Daniel Kurnos, who raised the stock from Hold to Buy with a price target of $20, citing increasing evidence to “buy into the story” as the company builds on momentum from its third-quarter results.

Kurnos pointed to strong holiday performance, new partnership wins, and the expansion of Lyft's Price Lock platform as key drivers of future growth. He also highlighted the company's Flexdrive platform as a strategic asset, positioning Lyft to participate in the autonomous vehicle market regardless of how the industry evolves.

The upgrade comes as Lyft continues to gain attention for a $100 million lawsuit filed late last month against San Francisco, alleging the city overcharged its ride-hailing services in taxes.

The Lyft Thesis: There are indications of the company performing "particularly well" during the primetime holiday hours, while benefiting from recent partnership wins, Kurnos said in the upgrade note.

Check out other analyst stock ratings.

Lyft could face ongoing pressure from robotaxi leaders Tesla Inc (NASDAQ:TSLA) and privately held Waymo, the analyst stated. He added, however, that Lyft could benefit from:

• Upside to rider metrics from the company's decision to reduce surge pricing while continuing with its Price Lock platform expansion
• Lyft expanding via partnerships, "both on the traditional and AV fronts, with prior partnerships also likely to produce near-term upside to metrics"
• Lyft's domestic focus and lower share means they both have less at risk in North America and everything to play for globally
• Lyft's Flexdrive platform seems suited to allow the company to be "an AV participant regardless of how the market evolves"

"Lyft's FCF inflection and forthcoming GAAP EPS inflection could usher in new potential shareholders, especially when (not if) Lyft turns its focus from debt paydown to capital returns," Kurnos further wrote.

LYFT Price Action: Shares of Lyft were up 2.59% to $14.64 at the time of publication Monday.

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