Lyft, Inc. (LYFT): A Bull Case Theory
We came across a bullish thesis on Lyft, Inc. (LYFT) on Substack by Stefan Waldhauser. In this article, we will summarize the bulls' thesis on LYFT. Lyft, Inc. (LYFT)'s share was trading at $11.16 as of April 17th. LYFT's trailing and forward P/E were 186 and 10.94 respectively according to Yahoo Finance.
Is Uber Technologies, Inc. (UBER) the Least Risky Internet Stock To Invest In?
A close up view of a hand holding a smartphone, using a ride sharing app.
Lyft's $197 million acquisition of European mobility platform Freenow marks a pivotal shift in the company's strategy, ending its North America-only focus and unlocking a broader global footprint. Freenow operates across nine European countries and more than 150 cities, with a leading position in the taxi-hailing segment. The deal, expected to close in late 2025, nearly doubles Lyft's total addressable market to over 300 billion rides per year, though it adds only ~$1 billion to gross bookings, or around 5% in inorganic growth. With Freenow estimated to generate €150–250 million in annual revenue and having just turned profitable in 2024 after years of losses, the $197 million price tag reflects roughly 1x sales—a modest valuation for an established European leader. Lyft, trading at less than 0.7x EV/sales compared to Uber's 3.5x, appears to be executing a strategic move at a compelling price.
CEO David Risher has highlighted this as a transformational moment for Lyft, leveraging Freenow's deep regulatory ties, regional expertise, and dominant market share in key cities like Berlin, London, and Madrid. Freenow's heavy focus on taxi bookings (90% of gross bookings in 2024) gives Lyft access to an under-digitized market where half of bookings still occur offline—presenting a long runway for tech-enabled growth. Initially, Lyft will retain the Freenow brand and support both apps, with integration allowing cross-platform use by customers in both continents. Over time, rebranding is likely as Lyft unifies its global identity. While the short-term financial impact is minimal, the strategic value is substantial. Lyft's entry into international markets erases a key investor concern and potentially sets the stage for renewed interest in its stock, particularly as the global mobility space evolves with autonomous vehicle technology. The acquisition represents a low-risk, high-upside catalyst for a company long discounted for its domestic limitations.
Lyft, Inc. (LYFT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held LYFT at the end of the fourth quarter which was 51 in the previous quarter. While we acknowledge the risk and potential of LYFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than LYFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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