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Barchart
Barchart
Mark R. Hake, CFA

LYFT Stock's Valuation Looks Too Cheap Based on Its FCF and Margins

Lyft Inc (LYFT) generated $766 million in free cash flow (FCF) last year, or over 13% of its revenue. However, LYFT stock has a 15% FCF yield now - too high - i.e., its valuation is simply too low. Based on a conservative 10% FCF yield, LYFT could be worth at least 31.5% more at $17.74 per share.

LYFT is at $12.21 in midday trading on Monday, March 17. That is up slightly from a recent low of $11.43 last week on March 11, and even below where it closed last year at $12.90. However, it's about flat from six months ago when LYFT closed at $12.25 on Sept. 17.

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