Lyft’s Q2 Results Demonstrate its Network Effect Remains Intact; Shares Attractive

Lyft reported strong second-quarter results with top-line and bottom-line figures coming in ahead of the FactSet consensus estimates as the firm increased riders and rider monetization. Strengthening demand also attracted more drivers to the platform and reduced the firm’s driver acquisition costs, firmly demonstrating Lyft’s network effect moat source. We were pleased that for the first time management provided long-term guidance, which is within the range of our projections, but we have reduced our 2022 net revenue projection mainly due to increased uncertainty surrounding the macro environment. However, that adjustment did not affect our fair value estimate, which remains at $65. Like its peer Uber, Lyft stock remains undervalued in our view.