Lyft is Gushing Huge Amounts of Free Cash Flow -- Someone Tell Wall Street

GuruFocus.com11-22 23:24

Lyft, Inc. (LYFT) generates large amounts of free cash flow (FCF) and seems to be under the radar on Wall Street. Based on conservative projections and the company's guidance, LYFT stock could be ...

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Based on conservative projections and the company's guidance, LYFT stock could be ...</p>\n\n<a href=\"https://finance.yahoo.com/news/lyft-gushing-huge-amounts-free-152413737.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Lyft is Gushing Huge Amounts of Free Cash Flow -- Someone Tell Wall Street</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nLyft is Gushing Huge Amounts of Free Cash Flow -- Someone Tell Wall Street\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-22 23:24 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/lyft-gushing-huge-amounts-free-152413737.html><strong>GuruFocus.com</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Lyft, Inc. (LYFT) generates large amounts of free cash flow (FCF) and seems to be under the radar on Wall Street. Based on conservative projections and the company's guidance, LYFT stock could be ...</p>\n\n<a href=\"https://finance.yahoo.com/news/lyft-gushing-huge-amounts-free-152413737.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LTM","symbol_name":"南美航空集团","start_time":0,"source_url":"https://finance.yahoo.com/news/lyft-gushing-huge-amounts-free-152413737.html","article_id":"2485520260","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/.s6JPrRV.AyezogjfJWJig--~B/aD00MDA7dz00MDA7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/us.finance.gurufocus/c274f37f25e02e2768b71a30d2daa87a"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2485520260","pubTimestamp":1732289053,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Lyft, Inc.  generates large amounts of free cash flow  and seems to be under the radar on Wall Street. Based on conservative projections and the company's guidance, LYFT stock could be worth over $31 per share, or +70%.As of Nov. 12, LYFT was at $18.34, with a market cap of $7.61 billion. This article will show why it could be worth over 70% more, or $31 per share with a $13+ billion market valuation.GuruFocus has detected 2 Warning Signs with LYFT.This is based on a 16% FCF margin estimate and analysts' revenue forecasts for 2025.Moreover, out-of-the-money  put options with nearby expiry periods could be a potential short-play opportunity here. That way an investor can potentially lower their buy-in target price and get paid to wait for LYFT to hit this price.Lyft reported on Nov. 6 its Q3 results were strong:. Moreover, as the table above shows, with a 16% FCF margin applied against analysts' 2025 revenue forecasts of $6.6 billion, FCF would rise over $1 billion:. One way analysts ca","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LTM":"南美航空集团","BK4523":"印度概念","BK4230":"旅客陆运","BK4585":"ETF&股票定投概念","LYFT":"Lyft, Inc.","BK4588":"碎股","BK4022":"陆运","BK4211":"区域性银行","BK4099":"汽车制造商","BK4548":"巴美列捷福持仓","BK4008":"航空公司","TTM":"塔塔汽车","FCF":"第一联邦金融"},"translate_title":"有人告诉华尔街，Lyft正在释放大量自由现金流","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"FCF":1,"LTM":1,"LYFT":1,"TTM":1},"content_text":"Lyft, Inc. (LYFT) generates large amounts of free cash flow (FCF) and seems to be under the radar on Wall Street. Based on conservative projections and the company's guidance, LYFT stock could be worth over $31 per share, or +70%. \nAs of Nov. 12, LYFT was at $18.34, with a market cap of $7.61 billion. This article will show why it could be worth over 70% more, or $31 per share with a $13+ billion market valuation.\n\nWarning! GuruFocus has detected 2 Warning Signs with LYFT.\n\nThis is based on a 16% FCF margin estimate and analysts' revenue forecasts for 2025.\n\nMoreover, out-of-the-money (OTM) put options with nearby expiry periods could be a potential short-play opportunity here. That way an investor can potentially lower their buy-in target price and get paid to wait for LYFT to hit this price. \nLyft's Strong Results\nLyft reported on Nov. 6 its Q3 results were strong: \n Its gross bookings and rides rose 16% YoY and active riders were up 9% YoY.\n Revenue was up +32% YoY.\n Q3 FCF was strong at $242.8 million, although slightly lower than Q2's $256.4 million.\n Nevertheless, over the last 12 months FCF hit $641.2 million.\n Management projected that its total 2024 FCF is forecast to exceed $650 million. (Note: free cash flow equals operating cash flow, less capital expenditures, and net equipment sales. FCF shows how much excess cash a company generates, and is thus free to be spent on buybacks, dividends, acquisitions, etc.)\n\nQ3 Adj. FCF and Margins\nThe Q3 FCF of $242.8 million represented 17.3% of its $1.52 billion Q3 quarterly revenue. \nThis was significantly higher than the $641 million in the last 12 months (LTM) FCF. Its LTM FCF margin was 11.7% of $5.46 billion in LTM revenue (i.e., 17.3% Q3 FCF margin vs. 11.3% LTM FCF margin).\nThis was because Lyft has been increasing its cash flow generation, as seen in the chart above. So, going forward, its free cash flow margins will likely stay high.\nProjecting FCF for 2025\nFor example, Lyft management said the company will make over $650 million in FCF in 2024. That could be an understatement. \nBased on analysts' estimates of $5.79 billion in revenue for 2024, FCF could be as much as $880 million.\nHere's why. If analysts' estimates of $1.56 billion for Q4 revenue occurs, and even with a much lower 12% operating cash flow margin, free cash flow for the year would still be $880 million. That would represent a 15.2% FCF margin for 2024.\n\nMoreover, as the table above shows, with a 16% FCF margin applied against analysts' 2025 revenue forecasts of $6.6 billion, FCF would rise over $1 billion:\n 0.158 x $6.6 billion 2025 est. sales = $1.044 billion in 2025\n $1.044b / $641.2 TTM FCF in Q3 = +63%\nThat would be 62.8% higher than the trailing 12 months (TTM) FCF of $641.2 million at the end of Q3.\nThat is why LYFT stock may be worth up to 70% more.\nPrice Targets for LYFT Stock\nOne way analysts can value a stock is to use an FCF yield metric. This is the inverse of a factor that is multiplied against FCF.\nFor example, using a 6.5% FCF yield for LYFT stock is the same as multiplying FCF by 15x:\n = 1/6.5% = 1/0.065 = 15.4x\nSo, multiplying the $650 billion in FCF for 2025 by 15.4x equals a market cap of $10 billion, or 31.5% higher than today's $7.6 billion.\n\nMoreover, as the table above shows, the estimate for 2025 is for a $16 billion target market value, or +111%.\nSo, on average LYFT stock could be worth 71% more at $31.42 per share.\nWall Street Got It Wrong\nSo, someone should tell Wall Street that this stock, based on its huge free cash flow, is woefully undervalued.\nHowever, some analysts agree that LYFT stock is undervalued. For example, AnaChart's survey of analysts shows a mean price of $22.32. \nAnaChart.com is a new site that tracks analysts' price targets (as if they were stocks). Its target is 21% higher than today. However, this is still not close to our 71% higher price target of $31.42. \nThe bottom line is that LYFT looks undervalued here based on its strong FCF and FCF margins.\nShorting out-of-the-money (OTM) put options (in nearby expiry periods), along with holding LYFT long, is a potential opportunity here.\nShorting Out-the-Money Puts\nFor example, look at the Dec. 20, 2024 put options expiration period. That is over one month away. This period will allow the short put investor to benefit from decay in out-of-the-money (OTM) options premiums. \nThat means selling short puts at strike prices well below today's trading price. That means making immediate income and giving investors a defensive range against deterioration in LYFT stock before the investor has to buy shares at the strike price.\nFor example, note that the $16 put option strike price has a large number of oustanding contracts, providing good liquidity. \nIts bid side premium is 25 cents. That gives the short seller an immediate short-put yield of 1.56% (i.e., $0.25/$16.00 = 0.0156).\n\nHere is how that works. The investor secures $1,600 for every put option shorted. Then, after entering an order to Sell to Open the account will receive $25.00 (hence the 1.56% yield).\nFor example, to short 10 puts the investor would secure $16,000 in cash or buying power with their brokerage firm. Then, after selling short 10 puts at this strike price, the account will receive $250.\nLeverage and Downside Risks\nNote that the investor has a low risk with this trade as the delta ratio is just -16.4 i.e., the options will move just 16 cents for every $1.00 move in LYFT stock.\nThat implies a low chance that LYFT falls to $16.00 or over 12% over the next month.\nMoreover, the investor would have a breakeven price of $16.00-$0.25 ($15.75), over 14% below the trading price of $18.34.\nSo, some less risk-averse investors might be willing to short the $17.00 strike price put. That implies a short put yield of 2.94% (i.e., $0.50/$17.00). This play has just a 27% implied probability of occurring as seen with the delta ratio.\nAs a result, if LYFT stock stays flat for the next 3 months, the implied expected return (ER) is close to 9% (i.e., 2.94% x 3 = 8.82%).\nThe bottom line is that LYFT stock looks very cheap here. One way long-term investors in LYFT stock can play this is to sell short deep out-of-the-money puts. That way they can get paid while waiting for the stock to fall.This article first appeared on \nGuruFocus.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"2","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.2","shortVersion":"4.29.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2485520260"}