Invest in Lyft
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Fastest-growing multimodal transportation networks in the United States and Canada.
The company generates revenue from service fees and commissions paid by the drivers for use of the Lyft Platform and related activities to connect the drivers with passengers to facilitate and successfully complete rides via its mobile application.
In addition, the company generates revenue from single-use ride fees paid by riders of shared bikes and scooters.
Market opportunity today includes transportation spend in the United States and Canada. In the United States alone, consumer expenditures on transportation were approximately $1.2 trillion in 2017. Lyft’s share of the U.S. ridesharing market has increased to 39% in December 2018 from 22% in December 2016.
Lyft long-term goal is to deploy a low-cost, scaled autonomous vehicle network that is capable of delivering a majority of the rides on the Lyft platform.
The ridesharing market and the market for other Lyft offerings, such as the network of shared bikes and scooters, are still in relatively early stages of growth and if such markets do not continue to grow, grow more slowly than expected, company’s business, financial condition and results of operations could be adversely affected.
There is intense competition from Uber which can result in the loss of market share, which could adversely affect business, financial condition and results of operations. There are also a number of companies developing autonomous vehicle technology that may compete with Lyft in the future, including Alphabet (Waymo), Apple, Baidu, Uber and Zoox as well as many other technology companies and automobile manufacturers and suppliers.
In 2017 and 2018 Lyft reported revenues of $1.06B and $2.06B, respectively. Lyft showed significant revenue growth over this period (209% and 103%).
Given these numbers, we project 2019 revenues of $3.2B-$3.4B with 50% growth. The average P/S ratio for Technology companies is 9x-10x. Therefore, the expected equity market value of Lyft is $28.8B-$34B in the base case.
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