Lyft, Inc. (LYFT)'s Outlook Remains Positive, Investment Bank Says

After Lyft, Inc. (LYFT) reported lower-than-expected first-quarter revenue, investment bank Benchmark nonetheless kept a $20 price target and a Buy rating on LYFT stock.

Lyft is likely to benefit from its expansion into new markets, its partnerships, an acquisition, and its nascent ad business, Benchmark believes.

LYFT's Positive Catalysts

The ridesharing company is just starting to expand into Canada and more sparsely populated parts of America, according to Benchmark. The strategy already appears to be working, as the firm's top line jumped 27% in Q1 versus the same period a year earlier, while its gross margin came in at a strong 35.3%, Benchmark noted.

Meanwhile, Lyft, Inc. (LYFT) is getting a lift from its partnerships, including its alliance with DoorDash (DASH), and LYFT's acquisition of FREENOW could help it make deals with overseas firms and internationalize its current partnerships, Benchmark hypothesized.

Finally, FREENOW could enable the firm to internationalize its ad business which is just getting off the ground.

The investment bank identified Lyft, Inc. (LYFT) as one of its top picks.

The Recent Price Action of LYFT Stock

In the last month, the shares have climbed 55%, while they are up 11% in the last three months.

While we acknowledge the potential of LYFT, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LYFT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires

Disclosure: None. This article is originally published at Insider Monkey.