Lyft (LYFT) Upgraded to Buy, Crowned TD Cowen’s Top SMID-Cap Pick

Lyft Inc. (NASDAQ:LYFT) is one of the 20 undervalued momentum stocks that are taking off. On June 24, TD Cowen analyst John Blackledge upgraded Lyft Inc. to Buy from Hold, raising the price target from $16 to $21. Notably, he named Lyft his “Best SMID-cap Idea” (small and mid-cap stock idea) for 2025.

Blackledge pointed to several key factors behind his upgraded view. One of the main reasons was Lyft’s focus on smaller U.S. markets. As per the analyst, cities such as Charlotte and Indianapolis showed over 30% year-over-year growth in Q1 2025, suggesting strength outside the company’s traditional top-tier markets.

A close-up view of a hand holding a smartphone, using a ride sharing app.

International expansion was another reason. The analyst highlighted Lyft’s planned acquisition of FREENOW, a European mobility platform, which is expected to contribute roughly €1 billion in annual gross bookings. Growth in Canada has also been notable, up 100% in 2024 and continuing with 50% growth in Q1 2025.

The analyst also highlighted that product innovation and improved user experience are also supporting the company’s growth. Blackledge pointed to initiatives such as Price Lock, which allows users to lock specific fares while helping Lyft build a base of recurring subscription revenue. The recent partnership with DoorDash is also driving user engagement and expanding the active rider base.

Blackledge believes Lyft is executing well and doesn’t need to gain market share from Uber, as it currently holds about 30% of the U.S. rideshare market, for its stock to perform. Over the long term, he sees upside from autonomous vehicles, which should expand the overall market opportunity.

Lyft Inc. (NASDAQ:LYFT) is a leading ride-sharing and mobility-as-a-service company that connects passengers with drivers through its digital platform. The company operates in major cities across the U.S. and Canada, offering ride-hailing, bike and scooter rentals, and fleet management solutions.

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.