Why is Lyft so Cheap?

Get ready for the airport rides.

Andrew Willis 25 February, 2022 | 1:18AM
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Andrew Willis: It looks like we’re approaching the light at the end of the tunnel on omicron. Travel seems to be on the rise, and for ride-sharing companies like Lyft (LYFT), that means demand for lifts to the airport could be about to take off.

Longer rides, including more airport ride requests, could help propel revenue generated per ride. Senior equity analyst Ali Mogharabi notes the company was collecting 14% more for each trip in 2020, with more demand for rides to the airport. And with air traffic levels this month stabilizing around 78% of pre-pandemic levels, imagine what demand will be when international travel restrictions are lifted.

Also with revenues up 70% year over year, similar to Uber’s earnings beat, Lyft seems to be solidifying a position as 2nd place provider – but with a purer play. We like that Lyft is focused on rides rather than food or logistics. Besides, if we’re going out more, we might not be getting delivery…

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Lyft Inc Class A20.21 USD5.98Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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