On Thursday, Bernstein analysts maintained a Market Perform rating for Lyft (NASDAQ:LYFT) with a steady price target of $15.00. According to InvestingPro data, the ride-sharing company’s stock, currently trading at $11.09, appears undervalued based on its Fair Value analysis. With a market capitalization of $4.6 billion and strong revenue growth of 31.4% over the last twelve months, Lyft shows promising fundamentals. The move comes as Lyft announced its intention to acquire FREENOW, a European mobility service with a focus on taxi operations, for a sum of €175 million ($197 million) in cash. The completion of this acquisition is anticipated in the second half of 2025.
Lyft’s latest move into the European market is seen as an effort to break free from the constraints of being solely focused on North American ridesharing. Europe accounts for approximately 20% of Uber (NYSE:UBER)’s Mobility business, indicating a significant market potential for Lyft’s expansion. The company’s strong financial position, with more cash than debt on its balance sheet (one of several InvestingPro Tips available to subscribers), supports this strategic expansion. Despite this strategic move, Bernstein analysts express concerns about Lyft’s late entry into the European market.
According to third-party monthly active user (MAU) data cuts, FREENOW holds a relatively small user base in its nine markets, with its strongest presence in Italy and Greece, where it claims 11% and 10% of the market share, respectively. The data indicates that Uber remains the dominant force in the European rideshare sector, with Bolt as the second leading competitor.
In a related development, activist shareholders Engine Capital confirmed their intention to nominate two directors to Lyft’s Board. This action underscores the heightened interest and activity surrounding the company’s governance and strategic direction.
The acquisition is a significant step for Lyft as it seeks to diversify its operations and compete in new markets. The transaction is expected to finalize in the latter half of 2025, marking Lyft’s entry into the European mobility space. Investors should note that Lyft’s next earnings report is scheduled for April 30, 2025, where more details about this strategic move may be revealed. For comprehensive analysis and additional insights, check out the detailed Pro Research Report available on InvestingPro, which covers this and 1,400+ other US stocks.
In other recent news, Lyft has announced its acquisition of FREENOW, a European online taxi marketplace, for $197 million in an all-cash deal. This strategic move is expected to double Lyft’s total addressable market from 161 billion to over 300 billion trips annually, as FREENOW operates in more than 150 cities across nine European countries. Analysts from DA Davidson, BMO Capital Markets, and BTIG have maintained their ratings on Lyft, with DA Davidson and BMO both reiterating a $15 price target. KeyBanc Capital Markets has also maintained a Sector Weight rating, noting potential benefits and challenges in Lyft’s European expansion.
Oppenheimer has initiated coverage of Lyft with an Outperform rating and a $15 price target, citing the rideshare industry’s growth potential and Lyft’s strategic investments in its supply chain. The acquisition of FREENOW is anticipated to add approximately seven percentage points to Lyft’s annualized gross bookings, contributing to its goal of reaching around $25 billion in bookings by 2027. Despite the opportunities, analysts have highlighted challenges, including competitive pressure from established players like Uber and Bolt and potential cost implications of scaling in Europe. Lyft’s efforts to expand internationally and enhance its offerings align with its broader strategy to increase market share and profitability in the competitive ride-sharing industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.