Cantor Fitzgerald’s Top Internet Stocks: Best Stocks To Buy According To $13.2 Billion Firm

10. LYFT Inc. (NASDAQ:LYFT)

Number of Hedge Fund Holders In Q2 2024: 53

Share Price Target Upside: 12%

Cantor’s Rating: Neutral

Cantor’s Share Price Target: $13

LYFT Inc. (NASDAQ:LYFT) is the second biggest ride sharing service provider in the US which provides it with a wide user base of drivers and riders. However, as chip maker Intel’s woes have taught us, market size is only part of the equation, as profitability and growth also drive investor sentiment. On both these fronts, LYFT Inc. (NASDAQ:LYFT) has left much to be desired. The firm’s stock dropped by 13% in August after it guided midpoint bookings of $4.05 billion for Q3 which were $100 million short of analyst estimates of $4.15 billion. LYFT Inc. (NASDAQ:LYFT) is yet to turn a profit either, and while the firm aims to achieve a $1 billion operating income, $25 billion in gross bookings, and $900 million in Free Cash Flow (FCF), investors remain doubtful. Cantor believes that while LYFT Inc. (NASDAQ:LYFT)’s market share and size provide it with advantages, it might be unable to improve margins.

ClearBridge Multi Cap Growth Strategy mentioned Lyft, Inc. (NASDAQ:LYFT) in its Q2 2023 investor letter:

“The sale of rideshare provider Lyft, Inc. (NASDAQ:LYFT), similar to our moves in communication services, prunes a smaller position to consolidate the portfolio in our highest conviction ideas. We initially purchased Lyft in May 2021 when rideshare volumes were still depressed due to COVID-19. While Lyft was a clear #2 behind Uber in domestic rideshare, we believed it was a cleaner way to play the U.S. recovery due to the focused nature of its business. However, poor execution and the uneven nature of the U.S. recovery, with West Coast markets where Lyft has historically had greater exposure lagging due to a lack of return to office work, further weakened its market position. In March, Lyft announced co-founder Logan Green would step down as CEO with David Risher, a former Amazon executive, taking his place. While Risher has laid out ambitions to drive Lyft’s market share higher, we believe doing so will require more than a few quarters fix. Furthermore, while the company has looked for areas to right size their cost base, we see necessary investments in price, service levels and product differentiation to drive this turnaround further pushing out the path to improved profitability.”