Susquehanna lowers Lyft stock price target to $14 on European expansion

Lyft presents a mixed investment case, with its Q3 guidance for gross bookings of $4.65-$4.80 billion and EBITDA of $125-$145 million generally exceeding analyst expectations, bolstered by the recent Freenow acquisition set to add an estimated €1 billion in annual gross bookings. Despite this positive outlook and a new partnership with United Airlines, analyst sentiment remains divided following mixed Q2 results; Susquehanna lowered its price target to $14, while TD Cowen raised its target to $22 on record ridership, and others like Bernstein and DA Davidson reduced targets due to lingering growth concerns, reflecting ongoing uncertainty regarding Lyft's long-term trajectory.

Analysis

Lyft presents a conflicting investment profile, characterized by divergent analyst sentiment following a mixed second-quarter performance against a backdrop of robust forward guidance. While Susquehanna recently lowered its price target to $14.00, citing concerns that are echoed by Bernstein and DA Davidson due to Q2 gross bookings and revenue missing Street expectations, other analysts like TD Cowen and Benchmark remain more optimistic, raising their target to $22 and maintaining a $20 target, respectively. This division is rooted in the company's strong Q3 outlook, which projects gross bookings of $4.65-$4.80 billion, representing 15% year-over-year growth and 3% above consensus, and an adjusted EBITDA of $125-$145 million, also above certain analyst estimates. The positive guidance is significantly bolstered by the recent acquisition of Freenow, which is expected to contribute approximately €1 billion in annual gross bookings and is partially factored into the Q3 forecast. Longer-term growth catalysts, including a new partnership with United Airlines and the Lyft Silver product, are expected to begin contributing financially in 2026 and 2025, respectively, suggesting a multi-year growth strategy. Despite recent performance inconsistencies, the company's 19.9% revenue growth over the last twelve months and a current trading price of $13.41, below most analyst targets, suggest potential undervaluation.

Key Decisions for Investors

• Investors should weigh the company's strong Q3 guidance and strategic growth from the Freenow acquisition against the execution risks highlighted by mixed Q2 results and divided analyst ratings.
• Monitor the upcoming Q3 earnings report closely, as meeting or exceeding the gross bookings guidance of $4.65-$4.80 billion will be a critical proof point for management's turnaround narrative and could serve as a major catalyst for the stock.
• Given the stock is trading below multiple analyst price targets, investors with a higher risk tolerance might consider the current valuation as an attractive entry point, while more cautious investors should wait for sustained evidence of growth consistency.
• Factor in that significant financial impact from new initiatives like the United Airlines partnership is not expected until 2026, positioning them as long-term value drivers rather than near-term earnings catalysts.