Is Lyft Stock a 2026 Buy Based on Earnings Momentum, Valuation, and Autonomous Vehicle Strategy?

The ride-sharing sector has long been a battleground of innovation and execution, with Lyft (LYFT) emerging as a disciplined challenger to Uber's dominance. As 2026 approaches, the question of whether Lyft stock is a compelling buy hinges on three pillars: earnings momentum, valuation metrics, and strategic growth through autonomous vehicle (AV) partnerships. Drawing from Q3 2025 results, analyst projections, and competitive positioning, the case for Lyft as a 2026 buy appears increasingly robust.

Earnings Momentum: A Turnaround in Profitability and Cash Flow

Lyft's Q3 2025 earnings report underscored a significant shift in its financial trajectory. The company reported record revenue of $1.7 billion, a 11% year-over-year increase, and net income of $46.1 million, reversing a $12.4 million loss in Q3 2024 according to the report. This turnaround reflects improved cost discipline and operational leverage, with gross bookings surging to $4.8 billion (up 16% YoY) and free cash flow hitting $277.8 million for the quarter according to financial reports.

More notably, Lyft has generated over $1 billion in trailing twelve-month free cash flow, a metric that signals strong cash generation and operational efficiency according to financial data. Analysts highlight that this momentum is driven by a focused strategy on U.S. core markets, where active riders grew 18% to 28.7 million in Q3 2025 according to market analysis. With fourth-quarter 2025 guidance for gross bookings of $5.01–$5.13 billion and adjusted EBITDA of $135–$155 million according to financial projections, the company is demonstrating consistent execution-a critical factor for long-term investor confidence.

Valuation: A Discounted Peer in a Competitive Landscape

Lyft's valuation metrics paint a compelling picture of undervaluation relative to its peers. As of late 2025, Lyft trades at a forward price-to-sales ratio of 1.26, compared to Uber's 3.22 according to market analysis. Despite a market cap of just $8 billion-far below Uber's $200 billion-Lyft has outperformed its rival in key metrics. For instance, Lyft's gross bookings have grown at a 16% YoY rate for 18 consecutive quarters, while Uber's EBITDA guidance has been soft due to its diversified but less profitable segments like Uber Eats and Freight according to financial reports.

Analysts argue that Lyft's disciplined approach-focusing on core ride-hailing and strategic partnerships-positions it as a more attractive investment. For example, TD Cowen and Evercore ISI have raised price targets to $32 and $30, respectively, citing improved execution and AV-related momentum according to analyst reports. With a stock price up 16% following AV partnership announcements according to market data, Lyft's valuation appears to reflect optimism about its future, not just past performance.

Autonomous Vehicle Strategy: A Catalyst for Long-Term Growth

Lyft's AV strategy is arguably its most transformative asset. By partnering with industry leaders like Waymo, Mobileye, and May Mobility, the company is positioning itself to lead the next phase of ride-sharing without shouldering the full R&D burden of developing its own AV technology according to financial analysis. Key developments include:
- A Waymo-powered autonomous taxi service in Nashville, launching in 2026, where Lyft will manage fleet operations according to service updates.
- A Mobileye collaboration in Dallas, expanding its AV footprint according to market reports.
- Partnerships with May Mobility in other markets, enhancing scalability according to strategic analysis.

These initiatives are not just incremental-they expand Lyft's total addressable market and improve operating margins. For instance, AV services could reduce driver costs, a historically volatile expense for ride-hailing firms. Analysts project that these partnerships will drive 14.6% revenue growth in 2026 and a 25.9% increase in EPS according to financial forecasts. Moreover, Wall Street views Lyft's AV strategy as a differentiator: Roth MKM maintains a Buy rating with a $24.00 price target, emphasizing the company's ability to leverage third-party AV tech according to investment research.

Risks and Cautionary Notes

While the case for Lyft is strong, risks remain. AV adoption is still nascent, and regulatory hurdles or technological delays could slow progress. Additionally, Uber's diversified model and larger market cap provide a buffer against sector-specific shocks. However, Lyft's lower valuation and higher growth rates suggest it is already priced for moderate success, not perfection.

Conclusion: A Strategic Buy for 2026

Lyft's combination of strong earnings momentum, attractive valuation, and strategic AV partnerships makes it a standout in the ride-sharing sector. With gross bookings growing at a double-digit pace, free cash flow surging, and analyst price targets rising, the company is well-positioned to capitalize on the autonomous vehicle revolution. For investors seeking a disciplined, undervalued play on the future of mobility, Lyft stock appears to be a compelling 2026 buy.