Lyft (LYFT -1.12%) has had a tough time on the public markets. Share prices of the ridesharing company, which has long been in the shadow of the larger Uber Technologies (UBER 0.35%), are down 77% since its IPO in 2019. Both ridesharing stocks were overpriced when they went public, and both tumbled when the pandemic started, but since then, their performances have diverged.
Uber stock has soared as the company has brought costs under control and delivered steady growth, reinforcing its competitive advantages. Based on its weak stock performance, you might expect to hear that Lyft lagged behind Uber in growth, but that isn't the case. Its revenue growth has been faster than Uber's over the last year. Lyft has now reported 16 straight quarters of double-digit percentage gross bookings growth.
It made strides on the bottom line as well. Last year, it reported a generally accepted accounting principles (GAAP) profit for the first time. In 2025's first quarter, Lyft reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $106.5 million, which was nearly double what it booked a year before. Lyft also reported free cash flow over the last four quarters of $919.9 million due in part to a large increase in insurance reserves. With Lyft's market cap at less than $7 billion, the stock trades for less than 8 times trailing free cash flow.
That's one good reason to bet that Lyft can double over the next three years. Let's take a look at a couple of others.
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Lyft is expanding
Unlike Uber, Lyft has historically only operated in North America, but the company made a big move in April, paying $200 million to acquire FreeNow, a ride-share platform in Europe that was owned by BMW and Mercedes-Benz.
The move essentially doubles Lyft's addressable market by giving it exposure to nine countries and more than 150 cities. The deal, which is expected to close in the second half of the year, should increase the company's annualized gross bookings by about $1 billion. That's less than 10% of Lyft's current gross bookings, but the growth opportunity is what's most valuable here. Additionally, FreeNow's revenue increased 13% in 2024, and the operation has reached break-even.
FreeNow will continue to operate under its own brand, but Lyft plans to roll out new benefits for riders and drivers and integrate the apps so that riders can use either one in North America or Europe.
Lyft continues to innovate
Lyft also continues to improve its service with new features and innovations. For example, it just rolled out Lyft Silver, a feature directed at older riders that makes the app easier to use and makes customer service more readily available. The goal is to more effectively appeal to a market that's soon to reach 70 million Americans. Currently, the over-65 demographic makes up just 5% of Lyft rides.
The company also introduced Price Lock, a feature that allows customers to lock in their prices for regular commutes for a small fee, rather than risking a jump from surge pricing, or "prime time" pricing, as Lyft calls it.
And it rolled out a new AI earnings assistant for drivers that's designed to help them maximize the value of their time on the road.
The path to a price doubling for Lyft stock
Overall, Lyft has growth opportunities thanks to the acquisition of Freeform and its track record of innovation, which has allowed it to take market share from Uber at times.
The stock is also trading at an attractive price-to-sales ratio of just above 1, and its low free cash flow ratio is setting it up to buy back shares, which could give a boost to the stock price over the long term.
If the company can maintain its growth rate and improve its profitability, doubling in the next three years seems achievable for the stock.
