Lyft stock holds steady after BofA reiterates Buy rating on United partnership

Lyft reported mixed second-quarter 2025 results, with earnings per share of $0.10 significantly missing the $0.26 anticipation and revenue of $1.59 billion falling below forecasts, leading Evercore ISI to maintain an 'In Line' rating. Despite these misses, the company provided third-quarter bookings guidance exceeding Street estimates and announced a new partnership with United Airlines. BofA Securities maintained its Buy rating and $12 price target, noting strong prior year stock momentum and the positive Q3 outlook.

Analysis

Lyft's recent financial disclosures present a conflicting picture for investors, characterized by a significant earnings miss juxtaposed with positive forward guidance and strategic developments. The company reported second-quarter 2025 earnings per share of $0.10, a 61.54% shortfall against the anticipated $0.26, with revenue of $1.59 billion also slightly below forecasts. These results prompted Evercore ISI to maintain a neutral "In Line" rating. In contrast, the company's outlook is more optimistic, with third-quarter bookings guidance of $4.65-$4.80 billion surpassing Street estimates of $4.60 billion, and EBITDA guidance of $125-$145 million bracketing consensus. A key positive catalyst is the newly announced partnership with United Airlines, which BofA Securities cited as a primary driver for reiterating its "Buy" rating and $12.00 price target. This strategic win is particularly notable as it helps mitigate the recent loss of its partnership with Delta to competitor Uber. Supporting the company's resilience is a healthy balance sheet, with cash holdings exceeding total debt, and a strong 54% stock return over the past year despite recent underperformance.

Key Decisions for Investors

• Investors should weigh the significant Q2 earnings miss against the stronger-than-expected Q3 guidance and the strategic value of the new United Airlines partnership.
• The divergence between BofA's 'Buy' rating, focused on forward outlook, and Evercore's 'In Line' rating, reflecting recent results, suggests a cautious approach may be warranted until Q3 performance validates the optimistic guidance.
• Monitor the execution and impact of the United Airlines partnership, as its success is a key potential catalyst to offset competitive pressures from Uber.
• Consider the company's strong balance sheet, which provides a degree of financial stability and downside cushion amidst the current operational volatility and mixed signals.