Lyft (NASDAQ: LYFT) reported robust Q1 2025 results, showing ongoing operational and financial momentum. Gross bookings grew by 13% year-over-year (y-o-y) to $4.2 billion, while revenue increased 14% to $1.5 billion. The company achieved a net income of $2.57 million, marking a substantial improvement from the $31.54 million net loss in Q1 2024, marking its third consecutive quarter of being profitable. Operationally, Lyft completed 218 million rides (up 16% y-o-y) and expanded its active rider base by 11% y-o-y to 24.2 million. Strategically, Lyft is broadening its presence in smaller, car-dependent cities like Indianapolis, where rides surged by 37% in Q1. The company is also investing in autonomous vehicle technology through collaborations with Mobileye, May Mobility, and Nexar, intending to incorporate self-driving vehicles into its platform by 2025. The company’s stock has risen 30% year-to-date, compared to a modest 1.3% increase in the S&P 500 (as of May 16).
LYFT stock offers a balanced combination of strengths and weaknesses, representing its moderate operating performance and financial state. However, when combined with its notably low valuation, the overall investment thesis seems appealing. See Buy or Sell Lyft?
We reach our conclusion by assessing the current valuation of LYFT stock in relation to its operational performance in recent years, along with its current and historical financial status. Our evaluation of LYFT according to key metrics of Growth, Profitability, Financial Stability, and Downturn Resilience indicates that the company has a moderate operating performance and financial standing, as elaborated below. Nevertheless, if you are looking for upside potential with reduced volatility compared to individual stocks, the Trefis High Quality portfolio provides an alternative – having outperformed the S&P 500 and delivered returns exceeding 91% since its inception.
How does Lyft’s valuation look vs. the S&P 500?
Based on the amount you pay per dollar of sales or profit, LYFT stock appears undervalued in comparison to the wider market.
• Lyft has a price-to-sales (P/S) ratio of 0.9 compared to a value of 2.8 for the S&P 500
• Moreover, the company’s price-to-free cash flow (P/FCF) ratio is 6.2 versus 17.6 for the S&P 500
How have Lyft’s revenues grown over recent years?
Lyft’s Revenues have seen significant growth over the last few years.
• Lyft has experienced its top line grow at an average rate of 22.2% over the past 3 years (compared to an increase of 6.2% for the S&P 500)
• Its revenues have increased by 31.4% from $4.4 Bil to $5.8 Bil in the last 12 months (against a growth of 5.3% for the S&P 500)
• Additionally, its quarterly revenues grew 13% to $1.45 Bil in the most recent quarter from $1.28 Bil a year earlier (versus a 4.9% improvement for the S&P 500)
How profitable is Lyft?
Lyft’s profit margins are significantly lower than most companies covered in the Trefis analysis.
• Lyft’s Operating Income over the last four quarters was $-119 Mil, translating to a very poor Operating Margin of -2.1% (compared to 13.1% for the S&P 500)
• LYFT Operating Cash Flow (OCF) over this period was $850 Mil, indicating a poor OCF Margin of 14.7% (versus 15.7% for the S&P 500)
• For the last four-quarter timeframe, LYFT Net Income was $23 Mil – reflecting a very poor Net Income Margin of 0.4% (versus 11.3% for the S&P 500)
Does Lyft look financially stable?
Lyft’s balance sheet presents a solid picture.
• Lyft’s Debt stood at $1.2 Bil at the close of the most recent quarter, while its market capitalization is $6.8 Bil (as of 5/14/2025). This suggests a moderate Debt-to-Equity Ratio of 22.2% (in contrast to 21.5% for S&P 500). [Note: A low Debt-to-Equity Ratio is advantageous]
• Cash (inclusive of cash equivalents) constitutes $2.0 Bil of the $5.7 Bil in Total Assets for Lyft. This provides a very strong Cash-to-Assets Ratio of 35.1% (compared to 15.0% for the S&P 500)
How resilient is LYFT stock during a downturn?
LYFT stock has underperformed significantly compared to the benchmark S&P 500 index during several recent downturns. While investors are hopeful for a soft landing for the U.S. economy, how severe might it be if another recession strikes? Our dashboard How Low Can Stocks Go During A Market Crash captures the performance of key stocks during and after the last six market crashes.
Inflation Shock (2022)
• LYFT stock declined 88.1% from a peak of $67.42 on 15 March 2021 to $7.99 on 24 May 2023, against a peak-to-trough drop of 25.4% for the S&P 500
• The stock is still yet to rebound to its pre-Crisis high
• The highest the stock has attained since then is $20.28 on 21 March 2024 and it currently trades at approximately $17
Covid Pandemic (2020)
• LYFT stock plummeted 70.2% from a peak of $53.94 on 11 February 2020 to $16.05 on 18 March 2020, compared to a peak-to-trough decline of 33.9% for the S&P 500
• The stock completely recovered to its pre-Crisis peak by 10 February 2021
Putting all the pieces together: What it means for LYFT stock
In conclusion, Lyft’s performance across the outlined parameters above is summarized as follows:
• Growth: Extremely Strong
• Profitability: Extremely Weak
• Financial Stability: Very Strong
• Downturn Resilience: Extremely Weak
• Overall: Neutral
With its very low valuation taken into account, this makes the stock appear attractive, supporting our assertion that LYFT is a wise stock to purchase.
While LYFT stock appears promising, investing in a single stock can carry risks. You might consider exploring the Trefis Reinforced Value (RV) Portfolio, which has exceeded its all-cap stocks benchmark (a mix of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to yield strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks has provided a responsive approach to maximize favorable market conditions while minimizing losses in downturns, as detailed in RV Portfolio performance metrics.
Read the full article here
