Lyft Surges on Waymo Robotaxi Deal: Is the Stock a Buy?

On Sept. 17, ride-sharing stock Lyft (NASDAQ: LYFT) had one of its best days of 2025 as markets reacted to its huge autonomous vehicle partnership. Lyft says it will work with Alphabet (NASDAQ: GOOGL) subsidiary Waymo to bring an autonomous ride-hailing service to Nashville, Tennessee, in 2026. Shares gained more than 13% on the news, marking Lyft’s third-largest single-day up move of the year.

Below, we’ll break down the implications of this partnership and examine whether the news warranted such a large gain. Ultimately, are Lyft shares poised to go on a long-term rally after considering this development?

Lyft Gets Its “Big Boy” Robotaxi Partnership

A large part of the reasoning behind Lyft’s Sept. 17 gain is the fact that it is now working with the marquee name in autonomous driving. Waymo, even more so than Tesla (NASDAQ: TSLA), is the world’s most advanced technology provider. That is especially true when it comes to robotaxis. Waymo says it currently provides more than 250,000 paid robotaxi rides a week, while Tesla’s service is just getting off the ground.

For Lyft, the Waymo partnership provides evidence that the market leader in robotaxis sees the firm as one worthy of working with, rather than fully competing against. Lyft is offering Waymo demand for rides due to the sizable ride-hailing market share it has built through its platform.

This shows that Lyft has grown large enough to prevent others from pushing it out of the growing robotaxi market for now. Lyft’s past robotaxi partnerships with much smaller players like May Mobility have elicited concerns that this could happen.

Still, Waymo can operate independently of Lyft in Nashville. This could deteriorate the importance of the partnership over time.

Notably, Lyft has now partnered with Waymo, joining its main competitor, Uber Technologies (NYSE: UBER), in doing so.

Clearly, Waymo still values Lyft’s customer base enough not to work with the market leader in ride-hailing simply. Last quarter, Uber’s gross mobility bookings of $23.7 billion were more than five times Lyft’s total gross bookings of around $4.5 billion.

Although Lyft is much smaller, Waymo wants to foster competition when it comes to robotaxis. That’s good news for Lyft if it hopes to increase its market share compared to Uber.

Fostering this competition makes perfect sense for Waymo, as it gives the firm more bargaining power in negotiations. If all goes well in Nashville, it wouldn’t be surprising to see Waymo extend its partnership with Lyft into more cities, further bolstering Lyft’s competitive position.

Analysts Raise Price Targets Massively, But Still See Downside in Shares

Given the implications on Lyft’s ability to compete with Uber, the strong gain in shares makes sense. Wall Street analysts seem to be in agreement. MarketBeat tracked several analysts who raised their Lyft price targets on Sept. 17 and 18. 

Furthermore, the average price target among those analysts increased by a whopping 38%. Thus, it seems these analysts were far more bullish on the announcement than the market.  

On the other hand, the MarketBeat consensus price target on Lyft is just $18.30. That figure implies around 17% downside in shares compared to the Sept. 18 close. The average price target among those four analysts who issued updates is only $19.25.

That number forecasts that shares could fall by nearly 13%, suggesting that these analysts already saw Lyft shares as significantly overvalued prior to the announcement. Overall, only Oppenheimer and Tigress Financial have price targets on Lyft above its Sept. 18 closing price of $22.10.

Competition and Revenue Concentration Put LYFT in an Unenviable Position

Over the long run, an investment in Lyft is somewhat difficult to justify. The company currently competes as the main rival to Uber, but others could supplant it over the coming years. Waymo may work with Lyft for a time, but it is likely to try to siphon off the company’s customer base as well. Additionally, Tesla and tech giant Amazon.com’s (NASDAQ: AMZN) subsidiary Zoox are powerful new entrants into the market that will increase competition.

Lyft also completely missed the boat on diversifying into food delivery. Meanwhile, Uber generated $21.7 billion in delivery gross bookings last quarter. This would be a very difficult market for Lyft to crack into, considering that DoorDash’s (NASDAQ: DASH) position is several times more robust than Uber’s. Despite the Waymo partnership being a strong positive development for Lyft, the company continues to find itself between a rock and a hard place.

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The article "Lyft Surges on Waymo Robotaxi Deal: Is the Stock a Buy?" first appeared on MarketBeat.