Lyft Earnings: Improvement in Network Effect Continues, but Profitability Remains a Few Years Away

We are maintaining our $25 fair value estimate for Lyft, despite Uber's growth and higher market share raising doubts about Lyft's network effect. While Lyft’s fourth-quarter and 2023 results included increases in rides, riders, and frequency, the firm's platform still needs to provide increased incentives to attract drivers, as indicated by the decline in the take rate. We continue to expect the take rate will stabilize and maintain our expectation for Lyft to achieve GAAP profitability by 2027, as its network effect continues to grow.