Should I Buy Lyft (LYFT)? Finance YouTuber Analysis

The analyst suggests buying Lyft as a basket play with Uber, highlighting its similar growth trajectory and strategy in the ride-sharing market. Despite slightly lower growth than Uber, Lyft's valuation is considered very attractive with a forward P/E of 9.6 and a price to free cash flow of 5. He anticipates significant market expansion for both companies with the advent of autonomous vehicles, which the market currently undervalues.

“The valuation I think is just too good to pass up. forward price to earnings multiple 9.6 forward price to free cash flow is five.” — ▶ 7:40

The YouTuber is buying Lyft shares, seeing it as a strong investment in the future of autonomy due to its role as a demand aggregator for ride-sharing. He notes Lyft's attractive valuation at 1.1 times sales and believes that companies like Lyft will naturally be where consumers go for autonomous rides, similar to how they use it for human-driven rides today.

“I own shares of Uber and Lyft because I think those are really good values from investments. Lyft trades for just 1.1 times sales.” — ▶ 00:08:00

The YouTuber believes Lyft is undervalued, trading at 1.3 times sales and an 18 forward P/E, which is reasonable for a growing company. He highlights its strong revenue growth (18% CAGR), positive net income, and solid balance sheet with over a billion in net cash. The long-term bullish case is tied to the market realizing its potential as an aggregator of demand in the autonomous vehicle space.

“When you look at the valuation for Lyft, see the market cap of $9.2 billion. Really, that's about $8.2 billion in enterprise value because got a solid balance sheet, solid growth company, I think a really fair price.” — ▶ 2:00

The analyst believes Lyft is significantly undervalued, trading at a low forward P/E of 12.7 and P/FCF of 8.6, with a strong balance sheet and net cash. The company is growing revenue at double-digits, is profitable, and has significant long-term growth potential through autonomous driving partnerships and fleet management, particularly with its Free Now acquisition in Europe.

“I think this is one of my top stocks for 2025. It is now beating the market, 19% to about 10%. But look at what's happened over the past 6 months. Shares are up 28%. The market's sentiment around Lyft is really starting to turn, and that's because the business continues to do really well, and the stock is very, very undervalued.” — ▶ Watch clip

The YouTuber is bullish on Lyft, not for its current ride-sharing business where it's number two to Uber, but for its potential in the future of autonomy. He argues that Lyft, being a smaller business, is better positioned to transition to a fully autonomous fleet, which could drastically increase supply and customer satisfaction, leading to significant market share gains and multiple expansion. He also notes its low valuation compared to Uber and a new buyback program.

“I think that's where Lyft ultimately has the advantage. And look, the upside is just too good to ignore. Lift's market cap, as I'm recording, even after the recent pop in shares, is about $7 billion.” — ▶ 14:40

The analyst believes Lyft's recent acquisition of Free Now in Europe, though small, is a strategic low-risk move positioning the company for the future of autonomous ride-sharing. He argues that Lyft, as the smaller player compared to Uber, can more easily pivot to a fully autonomous fleet model, potentially gaining a cost and supply advantage. This acquisition helps them build relationships with fleet operators, which will be crucial in an autonomous world.

“I think this is the kind of asymmetric potential that we want to see from Lyft.” — ▶ 3:00

The analyst views Lyft as an attractive investment due to its current low valuation (P/FCF under 10, forward EV/Sales 0.9, P/E 13) and a $500 million share buyback program. He believes the company is moving in the right direction towards profitability and has significant long-term asymmetric potential from its push into autonomous driving, which could lower costs and expand its market. Despite recent market disappointment with guidance, the core business is growing double digits.

“I recently added shares of lift if shares stay where they are now I will likely add that over coming months in the asymmetric portfolio but I think there was ultimately a lot to like from left this quarter continues momentum in the right direction but the upside the real asymmetric potential comes with autonomy.” — ▶ 10:00

The analyst is watching Lyft, noting its smaller market cap ($6.4 billion) compared to Uber, which could allow it more flexibility to experiment with business models and potentially become a better partner for autonomous driving companies. He suggests Lyft could go all-in on autonomous vehicles and leverage its existing user base to boost partnerships.

“the other one to keep an eye on is Lyft Lyft has a market cap of just 6.4 billion dollars so they're a distant second place behind Uber when it comes to ride sharing but that means that they can play around with different business models they can be potentially a better partner for these autonomous driving companies” — ▶ 8:40