LYFT

Lyft has reached an important inflection: revenue grew 9.9% to $5.90B and operating cash flow jumped 37.5% to $1.17B, the business is generating real free cash, and management initiated a $500M buyback (up 900% YoY). After years of heavy losses (-$1.06B, -$1.58B, -$340M from FY2021-FY2023), the #2 US rideshare platform is now self-funding — a genuine quality improvement.

But the eye-popping FY2025 net income of $2.84B (and the resulting 2.1x P/E, 48.2% net margin, and 86.9% ROE) is a mirage that must not be taken at face value. Operating income was actually negative at -$188M, so the $2.84B did not come from operations — it is dominated by a large non-operating item (most consistent with the release of a deferred-tax valuation allowance, which also explains the 327% surge in equity and the still-negative -$7.41B retained earnings). On an operating basis Lyft remains slightly unprofitable, with a -3.2% operating margin. The low P/E and high ROE are therefore not repeatable signals of cheapness or returns.