A practitioner read of Lyft at $13.90: ~21% FCF yield, buybacks reducing FY2025 share count ~18M, and a contrarian view that the AV bull narrative inverts the value thesis if Lyft owns the fleet.
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$1.12B TTM free cash flow vs. $5.28B market cap. Buybacks reduced FY2025 share count ~18M despite the $322M GAAP SBC charge. EV/FCF ~4.1x. The market is anchoring on the headline SBC and missing that functional dilution is near zero and cash generation is real.
Probability-weighted central estimate ~$25.83 / share vs. $13.90 close — approximately 90% expected-value upside in the base case. Downside floored by $1B+ FCF run-rate plus $2.88B net deferred tax asset. Methodology: DCF + comps + SOTP + NOL credit, comps refreshed from Yahoo Finance (UBER / DASH / ABNB).
The AV bull narrative — Lyft owns the fleet — likely inverts the value thesis, in the author's view. Owning an AV fleet would convert Lyft from an asset-light, high-ROIC, FCF marketplace into a Hertz / Avis-style heavy-capital fleet operator: depreciation, residual-value risk, financing burden, fleet maintenance, low return on capital. The platform thesis appears to work only if Lyft routes AV miles through partner fleets (Waymo, etc.) and stays asset-light. The author's lens; not a price target, not a recommendation.
The author owns shares of LYFT as disclosed in the case study. This is an educational case study, not investment advice, not a research report, not a buy/sell rating, not a price target, not an allocation recommendation, not an opinion of fairness for any corporate transaction. Every number traces to a public SEC filing. The Institute is not a registered investment adviser; this is a Lowe v. SEC publisher-exception publication.
Every analytical move in this case study cross-references a Guide chapter. If you want to learn the methodology in full, the Guides are where it's taught.
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