Lyft Stock Soar Due to 15% Annual Growth Through 2027 Projections


Lyft (NASDAQ:LYFT) has set ambitious targets for its future growth trajectory, aiming for a robust 15% annual increase in gross bookings through 2027, according to statements made at its inaugural investor day event. Additionally, the ride-hailing company anticipates a significant expansion in its nascent advertising business, with projections indicating an eight-fold growth over the same period.

The announcement fueled a surge in Lyft’s shares, which rose nearly 10% to $17.03 on Thursday, underscoring investor confidence in the company’s strategic direction and growth prospects.

Lyft’s forecast suggests its intention to solidify its position in the competitive North American ride-sharing market, where it faces stiff competition from industry leader Uber. Both companies are exploring avenues to diversify their revenue streams, including initiatives such as advertising and user subscriptions.

According to Zach Greenberger, Lyft’s Executive Vice President of Partnership Ecosystem, the company expects its advertising business to generate $400 million in gross bookings by 2027, marking a substantial increase from the projected $50 million for the current year. Lyft’s advertising platform, introduced in 2022, has experienced rapid growth, reporting a remarkable 250% increase in related revenue in the recent quarter ended March. Greenberger highlighted the appeal of Lyft’s advertising solutions to advertisers, particularly in the retail and hospitality sectors, citing their desire for targeted and measurable marketing strategies.

While Lyft’s advertising aspirations are significant, they face stiff competition from Uber, which boasts a larger global footprint and a more diversified business portfolio, including food delivery and freight services. Uber aims to achieve $1 billion in annual ad revenue, showcasing the intensifying battle for market share in the digital advertising space.

Looking ahead, Lyft is targeting a compound annual growth rate of approximately 15% in gross bookings for the period between 2024 and 2027, along with an adjusted core profit margin of about 4% by 2027. The company’s robust growth trajectory is underscored by its 14% increase in overall gross bookings reported for 2023, coupled with an adjusted core profit margin of 1.6%.

Lyft’s bullish forecast and strategic initiatives position it for sustained growth and competitiveness in the evolving ride-sharing landscape, signaling optimism among investors regarding its future performance and value-creation potential.

Featured Image: Megapixl

Please See Disclaimer

About the author: I am a writer and an editor with experience in publishing, research, and SEO strategies. I have an honors BSc in Social Work from the University of Benin, Nigeria.