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.

A ridesharing passenger and driver in a car, looking out the window in anticipation of their destination.

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.

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This article is originally published at Insider Monkey.