Lyft Inc. (NASDAQ:LYFT) shares fell 17% on Wednesday after the company reported a fourth-quarter sales miss on Tuesday.
The company generated $1.59 billion in revenue, falling short of the $1.75 billion analysts expected. It reported adjusted earnings per share of 15 cents, topping the 12-cent consensus.
Gross bookings rose 19% to $5.1 billion, while the active rider base grew 18% to 29.2 million. The board authorized a $1 billion stock repurchase program to support shareholder value.
Also Read: Lyft CEO Fires Back As Stock Tanks: ‘What Do They Want?’
For the first quarter of 2026, Lyft projects gross bookings between $4.86 billion and $5.00 billion, anticipating 17% to 20% year-over-year growth.
Analyst Actions
Multiple firms, including Wedbush and Cantor Fitzgerald, lowered their respective price forecasts on the stock.
- Wedbush analyst Scott Devitt maintained a rating of Underperform on Lyft and lowered the price forecast from $16 to $13.
- Cantor Fitzgerald analyst Deepak Mathivanan reiterated Lyft with a Neutral and lowered the price forecast from $21 to $14.
- Needham analyst Bernie McTernan maintained a Hold rating on Lyft.
Miss On Revenue Despite Solid Bookings Growth
Wedbush: Devitt argued the company delivered a soft fourth-quarter performance despite beating expectations on bookings growth.
The analyst said Lyft’s total rides grew well below Street forecasts, signaling that demand momentum remains weaker than investors want to see.
He noted that Lyft intentionally shifted its strategy away from chasing high ride volume and instead prioritized more profitable trips, which helped lift the company’s implied take rate above expectations and pushed adjusted EBITDA slightly ahead of consensus.
However, Devitt said net revenue still came in below estimates, mainly due to a one-time charge tied to changes in legal, tax, and regulatory reserves.
Looking ahead, the analyst said Lyft offered only modest first-quarter guidance, with EBITDA expectations falling short of Wall Street’s projections.
While management believes higher-priced offerings and premium services can drive faster bookings growth into 2026, he remained cautious about Lyft’s ability to hit its longer-term financial targets.
Devitt also warned that Lyft faces added risk from intensifying competition in U.S. ridesharing and the potential disruption from autonomous vehicles, given the company’s more limited diversification compared with peers.
Slowing Rides Growth And Margin Pressure Raise Concerns
Cantor Fitzgerald: Mathivanan noted that ride growth slowed by roughly three percentage points to 11% in the fourth quarter after strong momentum earlier in 2025.
The analyst attributed the deceleration to heavier competition in lower average-order-value rides and Lyft’s decision to prioritize higher-margin premium offerings, along with mix impacts from FREENOW and other initiatives.
Despite this, Lyft expects gross bookings growth to outpace rides growth in the first half of 2026 and continues to project acceleration in North America and globally, supported by product launches and partnerships, he told.
Lyft also reaffirmed its long-term 2027 adjusted EBITDA margin target of 4%, though Mathivanan acknowledged that achieving this would require a meaningful step-up in annual margin expansion.
2027 Targets Face Execution And AV Uncertainty
Needham: McTernan said first-quarter margins face a tough year-over-year comparison but expects incremental margins to improve through the rest of the year.
Even so, the analyst remains below Lyft’s 2027 targets, noting that the softer 2026 starting point makes those longer-term goals harder to achieve.
On Lyft’s path to its 2027 targets, he pointed out that management reaffirmed its goal of reaching $25 billion in bookings and $1 billion in adjusted EBITDA.
Achieving that would require a 16% bookings CAGR from 2025 levels and steady annual margin expansion.
As a result, he questions whether Lyft can sustain mid-to-high teens growth through 2027 without additional M&A activity.
Regarding autonomous vehicles, McTernan said Lyft continues to position hybrid networks as the winning model.
The analyst believes lower pricing will be key if AVs are to expand the overall rideshare market meaningfully.
LYFT Price Action: Lyft shares were down 16.97% during regular trading and down 0.50% in after-hours trading on Wednesday, last trading at $13.92, according to Benzinga Pro data.
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