Analysts Jake Fuller and Ali Faghri said in a research note to investors that Lyft's improving U.S. ride-hail competitive dynamics and the company's "surprising leverage to that trend" should allow Lyft to reach EBITDA positive in 2021 compared with prior expectations of 2023.
Fuller said the key driver of the improving competitive backdrop is simple, noting that Lyft and rival Uber Technologies (UBER) - Get Report are now public, and Uber needs margin from U.S. ride hail to support its efforts internationally and in the "highly competitive" restaurant delivery business.
"The main driver is assumed price increases, with limited impact on demand and high flow through to take-rate and contribution margin," the note said. "Underlying our upgrade and revisions is a a simple idea: We all underestimated
how quickly the competitive mindset might shift under public ownership and how much leverage there is in the model to pricing."
Shares of Uber were off slightly to $33.30.
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