Lyft Surges Ahead With an Inaugural Share Repurchase Plan – Buyback Wednesdays
I am embarrassed to say that I have never downloaded the Lyft app. Despite all the complaints about Uber and friends claiming Lyft is cheaper at times, I am mostly stuck to Uber because the app works for me both when I am traveling domestically as well as in most international locations. I was amused to discover that Uber was even trying to get me to hail a car in Venice, where there were no cars to be found.
Over the years, I paid even less attention to Lyft’s stock as it always seemed to be a distant second and the company didn’t have someone like Dara Khosrowshi at its helm to move the needle for shareholders. That changed when I noticed a large stock buyback announcement by the company.
Buyback activity surged in February with 160+ firms announcing share buyback plans, all of which are listed on our Stock Buyback Announcementspage. Lyft (LYFT) announced its first-ever buyback and also scored 83 on our IA quant model (without momentum and valuation factors) —well above the threshold of 70 we use to take a closer look at companies.
Lyft, Inc. (LYFT), the second-largest rideshare company in the U.S., has built its brand around a more approachable and community-driven image, stemming from its early days of displaying large pink mustaches on the car bumpers and fist-bumps by its drivers. This positioning appeals to users who view Uber Technologies, Inc. (UBER) as a corporate or aggressive alternative. With a market capitalization of $5.46 billion, Lyft continues to navigate a fiercely competitive landscape, facing strong rivalry from industry leader Uber.
The recent news of Tesla seeking approval to launch a ride-hail service in California, caused a surge in share prices for both Lyft and Uber. However, Tesla has clarified that they intend to operate independently rather than pursue partnerships, positioning themselves as a direct competitor to ride-hailing giants Uber and Lyft, as well as the autonomous taxi service Waymo. The automaker has the permit to launch his AVs in California with driver assistance but is awaiting permission for a driverless ride.
Lyft, Inc. (LYFT): $12.41
Market Cap: $5.08B
EV: $3.48B
Key Insights
Lyft’s market share at the end of January 2025 reached 29%, its highest since 2022, driven by strong execution and customer-focused innovation.
In 2024, the company posted positive net income for the first time in its operating history and a record free cash flow.
Lyft’s active riders and total rides have increased significantly, contributing to a surge in gross bookings and improved profitability metrics.
Lyft’s DoorDash partnership resulted in nearly 8 million rides, contributing to a record number of scheduled rides and is set to drive stronger performance for Lyft in 2025.
Lyft Media which offers a suite of advertising products is projected to grow, targeting an annualized revenue run rate of $100 million by Q4 2025.
The newly announced $500 million share repurchase plan which represents 8% of its market cap at announcement underscores the company’s improving financial position.
Lyft operates as a ridesharing and urban mobility platform, providing on-demand car rides, bike-sharing, scooters, and specialized services like healthcare transportation across the U.S. and Canada. The company has introduced innovative features, including Women+ Connect and Price Lock, to enhance user experience and engagement. Price Lock allows riders to pay a small fee for fixed pricing on frequent rides, with nearly 70% of users subscribing on a month-to-month basis, boosting rider retention. Women+ Connect, a feature that matches women and nonbinary drivers and riders, has facilitated over 50 million rides since its launch, offering a more tailored experience for users.
Lyft’s market share fluctuated between 24% and 33% in recent years, peaking at 33% in 2018 before settling around 24% in March 2024. The climb to 29% by January 2025 reflects Lyft’s strongest market presence since mid-2022. This uptick is attributed to operational improvements, customer-focused innovations like Price Lock, Lyft Media growth, and a favorable driver supply environment.
The global ridesharing market is projected to reach $96.9 billion by 2030, growing at a CAGR of 13.7% from 2025 to 2030. Asia Pacific led the industry in 2024, holding 49.3% revenue share, presenting a strong expansion opportunity for Lyft to grow its market presence if it chooses to go international.
Lyft’s transportation network includes:
Ridesharing Marketplace – connecting drivers and riders across the U.S. and Canada with options like Wait & Save, XL, Black, and Green.
Express Drive – A car rental program for drivers without suitable vehicles, providing rentals through its subsidiary Flexdrive and partners.
Light Vehicles – A shared network of bikes and scooters in select cities, offering cost-effective, active options for short trips and first/last-mile transit connections.
Lyft’s share price has fallen sharply since its peak in early 2021, dropping from around $67 in March 2021 to approximately $13.06 by March 3, 2025—a nearly 80% decline. The company’s ride volume took longer than expected to recover back to pre-pandemic levels. While revenue grew, the slower rebound dampened investor confidence. However, 2023 and 2024 marked a turnaround, with active riders reaching a record 24.7 million by Q4 2024. Despite this progress, Lyft’s stock reacted negatively to its latest earnings release, reflecting soft guidance and lingering investor skepticism.
Source: InsideArbitrage
Lyft’s Crossroads: Shift Gears for Growth?
Lyft has struggled with momentum, with its stock declining 69% over the past five years, while Uber has surged 118% in the same period. Unlike Uber’s global expansion (operating in 70 countries and 10,000+ cities), Lyft has focused primarily on North America, operating in 600+ U.S. cities and 12 Canadian markets, strengthening its domestic presence but limiting its international footprint compared to Uber, Ola, and DiDi.
Lyft’s competitive pricing which is roughly 15% cheaper than Uber has helped gain market share but at the risk of squeezing margins and long-term profitability. To remain competitive, Lyft must strike a balance between affordability and sustainable margins, a challenge given Uber’s scale and diversified business model.
Unlike Uber, which has expanded into food delivery and logistics, Lyft remains primarily a rideshare-focused company—an advantage in specialization but a constraint on broader growth opportunities. However, Lyft could reshape its trajectory by:
Expanding internationally into markets like Mexico, Australia, or Europe to unlock new revenue streams.
Leveraging its driver network for small-scale logistics, such as delivering packages, or retail orders, tapping into the e-commerce boom.
Exploring food delivery, utilizing its existing infrastructure to enter the high-demand sector, much like Uber Eats, which posted 20% YoY revenue growth in Q4 2024.
Alternatively considering competition is fierce both in international markets and the food delivery business, it could double down on its U.S.-focused strategy, capitalizing on healthcare transportation and advertising to drive domestic growth.
Its advertising business presents an additional avenue for revenue growth, potentially providing a high-margin revenue stream to complement its core ridesharing business. The company has had success with its in-app ads. The company achieved its target of a $50 million annualized run rate that it committed at its Investor Day. It now expects to exit 2025 at an annualized run rate of around $100 million.
Lyft has a solid foundation to evolve, but the question here is: Will it follow Uber’s path or forge its own?
Valuation
Lyft currently has a market cap of $5.08 billion, while its major competitor, Uber, is nearly 29 times larger at $157.22 billion. The company’s forward PE of 13.4 is more attractive compared to the sector median of 20.4 and Uber’s 30.08. This lower valuation reflects market sentiments about Lyft’s future growth and profitability, whereas Uber’s higher valuation is supported by its strong momentum, growth, and profitability.
Financials
Lyft has achieved five consecutive years of revenue growth, recording a CAGR of 9.86%, and its expected forward revenue growth of 18.6% looks promising. The company maintains a strong balance sheet with more cash than debt, reinforced by record revenues of $1.5 billion and $1.55 billion in Q3 and Q4 2024 respectively, alongside strong free cash flow. For 2024, Lyft’s free cash flow reached a record $766.27 million, a significant turnaround from a negative $352 million in 2022, with Q2 and Q3 serving as peak quarters. The combination of disciplined cost management, robust demand, and strategic innovations under Risher’s leadership focussing on a “customer-obsessed” culture, transformed Lyft from a loss-making entity into a profitable business in 2024.
Source: Lyft ( Supplemental Data -Q4 2024)
Insider Purchases
Insider purchases, particularly those made by a company’s C-suite executives, are often seen as a positive indicator of the company’s potential for growth. Last year, Lyft’s CEO John David Risher acquired 65.61K of the company’s shares within a brief period of just two months. His first purchase was especially well-timed.
Source: InsideArbitrage
Lyft’s Shift: From Dilution to Shareholder Returns
Lyft has historically diluted shareholders due to stock-based compensation (SBC) issued to employees. In 2022, SBC expenses totaled $750.8 million, reflecting ongoing share issuance. However, the company has since cut SBC expenses by half to $330.9 million in 2024, signaling improved financial discipline.
Source: InsideArbitrage
Uber, on the other hand, has transitioned from aggressive growth to a more balanced strategy, leveraging cash flows and selective buybacks to manage its share count. Lyft’s annual share increase of 7.88% far exceeds Uber’s 4.85%, highlighting its reliance on equity. Uber also announced an inaugural $7 billion share buyback early last year, representing around 5% of its market cap at announcement.
Now, in 2025, Lyft has taken a major step forward, announcing its first-ever $500 million share repurchase, representing 8.5% of its market cap at the time of announcement. This move suggests a shift from dilution to potential shareholder returns. If the company announces an Accelerated Share Repurchase (ASR), then it could trigger a rally in its share price given the high short interest rate of 12%.
Check out the full article on InsideArbitrage here:
https://www.insidearbitrage.com/2025/03/lyft-surges-ahead-with-an-inaugural-share-repurchase-plan-buyback-wednesdays/