11 Best Gig Economy Stocks to Buy According to Hedge Funds

7. Lyft, Inc. (NASDAQ:LYFT)

No. of Hedge Fund Holders: 51

Lyft, Inc. (NASDAQ:LYFT) is the second-largest ride-sharing business in the U.S. followed by Uber. Lyft operates under the same business model as Uber, but the company focuses on getting people to their destinations. The company also operates a bike and scooter share. Lyft facilitates the gig economy and offers a network of riders and drivers to easily connect through its app. As a service charge, Lyft takes a commission on every ride.

Lyft, Inc. in collaboration with autonomous driving developer Mobileye plans to launch robotaxis in Dallas, Texas, through this partnership as early as 2026. As this deal benefits Mobileye, it will also assist Lyft in cutting expenses and increasing its profit margins in the long term.

Wolfe Research analyst Shweta Khajuria has reiterated a Hold rating on LYFT shares and remains constructive on LYFT stock. Khajuria cited that the company has exceeded the high end of its bookings outlook for the first three quarters of 2024 and surpassed the high end of EBITDA guidance in each of the last 12 quarters. The analyst expects the company’s Q4 bookings to increase by 16.9% year-over-year compared to the consensus estimate of 15.7%, while expecting the EBITDA margin to grow 2.4% from a year ago, in line with the Street’s estimate.

Another analyst, Mike McGovern from Bank of America, kept a Buy rating on LYFT shares and reduced the price target from $21 to $19, considering the rising competition and uncertainty around autonomous vehicle adoption. However, overall analysts see LYFT holding its strong position as the Street might be overestimating the timeline for Waymo’s public launch.