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Lyft Initiation:

A High-Growth, Scalable, Recurring Business Model with Many Levers for Margin Expansion

Published July 1, 2019


  • We see Lyft benefiting from broader adoption in the still nascent and underpenetrated Mobility-as-a-Service (MaaS) space and are encouraged by its heavy exposure to the U.S., given our expectation for a healthy pricing/promotional landscape.

  • Lyft’s scalable business model is the key to long term success, and we expect potential margin expansion to resonate well with investors in the coming years. Our model assumes non-GAAP profitability by 2023 (GAAP in 2024), with unlevered free cash flow generation in 2022.

  • We believe LYFT shares offer a free optionality on autonomous vehicles, as LYFT is investing heavily and note MaaS providers will be among the earliest adopters. Competitive pressures from developers of this technology (e.g. Alphabet’s Waymo, Tesla and Apple) pose a potential risk to Lyft’s long-term business prospects.


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