Lyft Posts Mixed Q3; Confident on Long-Term Margin Expansion; Network Effect Intact; FVE Down to $55

In the U.S. market, Lyft has quickly emerged as the number-two ride-sharing player, a position we think the firm will keep for years to come. It has successfully gained share going head to head against the market leader, Uber, in pursuing riders in an addressable market (including taxis, ride-sharing, bikes, and scooters) that we value at over $550 billion (based on gross revenue) by 2024, from our estimate of $224 billion in 2019. In our view, Lyft warrants a narrow economic moat and a stable moat trend rating, thanks to the network effect around its ride-sharing platform and intangible assets associated with riders, rides, and mapping data, which we think can drive Lyft to profitability and excess returns on invested capital.