Lyft, Inc. (LYFT): A Bull Case Theory

We came across a bullish thesis on Lyft, Inc. on Emil Hartela Investing’s Substack. In this article, we will summarize the bulls’ thesis on LYFT. Lyft, Inc.'s share was trading at $20.64 as of October 21st. LYFT’s trailing and forward P/E were 98.30 and 19.34 respectively according to Yahoo Finance.

Lyft, a U.S.-based ride-hailing company, connects riders and drivers through its app while providing insurance coverage for trips. Historically, Lyft has grown steadily in ride volumes and revenue but remains smaller than Uber and has traded at depressed valuations due to lack of profitability and fears of autonomous vehicle (AV) disruption. A turning point emerged with the September 2025 partnership between Lyft and Waymo, a leader in AV technology, aimed at expanding robotaxi services in Metro Phoenix.

This collaboration positions Lyft to benefit from the transformative potential of AVs, which drastically reduce labor costs, lower ride prices, and could fundamentally shift urban mobility by making car ownership largely unnecessary. As AV adoption grows, longer commutes and decentralized living become feasible, expanding the total addressable market far beyond the current $60 billion ride-hailing industry. Lyft’s $6 billion revenue today represents only a fraction of this opportunity, and even capturing a modest share of AV robotaxi rides could dramatically increase its value.

Risks remain, including potential dominance by players like Tesla who might bypass traditional platforms, and the possibility that Lyft’s role could shrink to an app intermediary, limiting margins. However, the Waymo partnership mitigates these risks by showing AV leaders are willing to collaborate rather than exclude Lyft.

This deal, coupled with Lyft’s existing marketplace infrastructure, positions the company to participate in a multi-trillion-dollar future ride-hailing market. Overall, Lyft offers a compelling investment case as a smaller player poised to benefit disproportionately from the growth of autonomous transportation, with substantial upside if robotaxi adoption accelerates.

Previously we covered a bullish thesis on Lyft, Inc. (LYFT) by Stefan Waldhauser in April 2025, which highlighted the Freenow acquisition, expanding Lyft’s footprint into nine European countries. The company's stock price has appreciated approximately 85% since our coverage as investors recognized its international growth. Emil shares a similar bullish view but emphasizes the Lyft–Waymo autonomous vehicle partnership and future robotaxi opportunities.

Lyft, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 51 hedge fund portfolios held LYFT at the end of the second quarter which was 56 in the previous quarter. While we acknowledge the potential of LYFT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.