3 Reasons the Bulls Are Excited About Lyft

Lyft (NASDAQ: LYFT) has spent most of its time as a public company fighting skepticism. It's smaller than Uber Technologies. It's more concentrated. It doesn't have food delivery or freight to balance out softness in ride-hailing. For years, those traits appeared to be weaknesses.

However, in 2025, the story takes a different turn. Lyft is showing signs of becoming a more disciplined, efficient, and strategically sharper business. The company isn't perfect -- far from it -- but the pieces are falling into place in ways that are starting to excite long-term investors.

Here are three reasons the bulls are warming up to Lyft again.

Image source: Getty Images.

A focused business is gaining traction

Lyft's smaller footprint, once a liability, has become an advantage. While Uber manages a sprawling global portfolio across dozens of countries and multiple business lines, Lyft runs a tighter, simpler operation. That focus allows it to channel resources into improving service quality where it matters most.

The results are measurable. Active riders continue growing at a healthy clip. Ride volume is rising. Driver supply is healthier than it has been in years. And above all, gross bookings have reached a new high in the latest quarter .

This company is not the chaotic, pandemic-era Lyft that struggled to match demand with drivers. It's now a more stable business with cleaner operations, sharper execution, and better user consistency.

In an environment where investors are rewarding predictability over hypergrowth, Lyft's operational reset is exactly what the market wants to see. And because Lyft is not stretched across dozens of business units, it can sustain this consistency without diluting management attention.

Strategic growth moves without reckless spending

The biggest surprise in Lyft's recent strategy is the remarkable discipline it has shown in its expansion. Instead of chasing every shiny new vertical, Lyft is growing through targeted moves that extend its core strengths.

A notable example is its acquisition of Freenow, a major European mobility platform with a strong presence in premium urban markets. Freenow adds three things bulls love:

• Immediate international scale in cities that matter, without the years of regulatory and operational learning curves.
• A more diversified rider base, including regulated taxis and higher-income users.
• A larger addressable market that complements Lyft's North American dominance.

This acquisition is a smart expansion, not a reckless one. It diversifies revenue, enhances data depth, and gives Lyft a European foothold without incurring billions of dollars in costs.

The company is also leaning into partnerships, particularly in the areas of autonomous vehicles (AVs) and artificial intelligence (AI). With Waymo, Baidu, and others , Lyft is positioning itself as the platform layer for AV rides. It doesn't need to build an autonomous driving stack. Instead, it becomes the distribution channel that connects riders with robotaxis as they begin rolling out across the U.S. and European cities.

By adding its partnership with Anthropic to streamline customer support and drive margin improvements, you get a company expanding in areas where it has leverage, not where it has to spend heavily. This is exactly the type of strategic discipline bulls want in a turnaround story.

A path to sustainable profitability

The bulls' strongest argument isn't about growth at all. It's about cash flow.

Lyft has spent much of its public life burning through capital, but that phase is coming to an end. The company has now delivered multiple quarters of positive free cash flow, improved adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, and demonstrated clear operating leverage as the ride-hailing market stabilizes.

Better still, Lyft doesn't need to become a hypergrowth company to generate growing cash flow. Ride-hailing is a scale-friendly business: Once the company covers its fixed costs, incremental rides have a significant impact on the bottom line. As Lyft adds rides without ballooning spending, margin expansion becomes much easier. In other words, profits will expand faster than revenue.

So, when a company moves from "can it survive?" to "can it compound?", sentiment tends to shift quickly. That's what's happening to Lyft now.

What does it mean for investors?

Lyft isn't trying to outmuscle Uber. It's trying to out-execute itself. And slowly, quietly, the company is doing just that. Bulls see a company that has matured -- one that runs a tighter ship, expands selectively, partners intelligently, and understands that profitability -- not empire-building -- is the real prize.

If Lyft continues executing with this discipline, it can evolve into a steady, cash-generating mobility platform with more upside potential than the market currently prices in. It's a company worth keeping an eye on.

Lawrence Nga has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Baidu and Uber Technologies. The Motley Fool recommends Lyft. The Motley Fool has a disclosure policy.