Lyft, Inc. (NASDAQ:LYFT) Is Expected To Breakeven In The Near Future
We feel now is a pretty good time to analyse Lyft, Inc.'s (NASDAQ:LYFT) business as it appears the company may be on the cusp of a considerable accomplishment. Lyft, Inc. operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada. The US$6.8b market-cap company announced a latest loss of US$340m on 31 December 2023 for its most recent financial year result. As path to profitability is the topic on Lyft's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Lyft
Lyft is bordering on breakeven, according to the 37 American Transportation analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$58m in 2026. So, the company is predicted to breakeven approximately 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 79% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Lyft given that this is a high-level summary, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Lyft currently has a debt-to-equity ratio of 160%. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Lyft to cover in one brief article, but the key fundamentals for the company can all be found in one place – Lyft's company page on Simply Wall St. We've also put together a list of relevant factors you should further research:
Valuation: What is Lyft worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Lyft is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lyft’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
