Is Lyft Stock Gaining Momentum?
Lyft (NASDAQ: LYFT) reported strong Q1 2025 results, indicating continued operational and financial momentum. Gross bookings increased by 13% year-over-year (y-o-y) to $4.2 billion, and revenue rose 14% to $1.5 billion. The company achieved a net income of $2.57 million, a significant improvement from the $31.54 million net loss in Q1 2024, marking its third consecutive profitable quarter. Operationally, Lyft completed 218 million rides (up 16% y-o-y) and grew its active rider base by 11% y-o-y to 24.2 million. Strategically, Lyft is expanding its footprint in smaller, car-dependent cities, such as Indianapolis, where rides grew by 37% in Q1. The company is also investing in autonomous vehicle technology through partnerships with Mobileye, May Mobility, and Nexar, aiming to integrate self-driving vehicles into its platform by 2025. The company’s stock is up 30% year-to-date, compared to a modest 1.3% gain in the S&P 500 (as of May 16).
Photo by Mohamed_hassan on Pixabay
How does Lyft’s valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, LYFT stock looks cheap compared to the broader market.
• Lyft has a price-to-sales (P/S) ratio of 0.9 vs. a figure of 2.8 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 6.2 compared to 17.6 for S&P 500
How have Lyft’s revenues grown over recent years?
Lyft’s Revenues have grown considerably over recent years.
• Lyft has seen its top line grow at an average rate of 22.2% over the last 3 years (vs. increase of 6.2% for S&P 500)
• Its revenues have grown 31.4% from $4.4 Bil to $5.8 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues grew 13% to $1.45 Bil in the most recent quarter from $1.28 Bil a year ago (vs. 4.9% improvement for S&P 500)
How profitable is Lyft?
Lyft’s profit margins are considerably worse than most companies in the Trefis coverage universe.
• Lyft’s Operating Income over the last four quarters was $-119 Mil, which represents a very poor Operating Margin of -2.1% (vs. 13.1% for S&P 500)
• LYFT Operating Cash Flow (OCF) over this period was $850 Mil, pointing to a poor OCF Margin of 14.7% (vs. 15.7% for S&P 500)
• For the last four-quarter period, LYFT Net Income was $23 Mil – indicating a very poor Net Income Margin of 0.4% (vs. 11.3% for S&P 500)
Does Lyft look financially stable?
Lyft’s balance sheet looks strong.
• Lyft’s Debt figure was $1.2 Bil at the end of the most recent quarter, while its market capitalization is $6.8 Bil (as of 5/14/2025). This implies a moderate Debt-to-Equity Ratio of 22.2% (vs. 21.5% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $2.0 Bil of the $5.7 Bil in Total Assets for Lyft. This yields a very strong Cash-to-Assets Ratio of 35.1% (vs. 15.0% for S&P 500)
How resilient is LYFT stock during a downturn?
LYFT stock has fared much worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• LYFT stock fell 88.1% from a high of $67.42 on 15 March 2021 to $7.99 on 24 May 2023, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $20.28 on 21 March 2024 and currently trades at around $17
Covid Pandemic (2020)
• LYFT stock fell 70.2% from a high of $53.94 on 11 February 2020 to $16.05 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 10 February 2021
Putting all the pieces together: What it means for LYFT stock
In summary, Lyft’s performance across the parameters detailed above is as follows:
• Growth: Extremely Strong
• Profitability: Extremely Weak
• Financial Stability: Very Strong
• Downturn Resilience: Extremely Weak
• Overall: Neutral
Taken together with its very low valuation, this makes the stock look attractive, which supports our conclusion that LYFT is a good stock to buy.
While LYFT stock looks promising, investing in a single stock can be risky. You could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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