Lyft, Inc. (NASDAQ:LYFT) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Lyft, Inc. operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada. The US$4.8b market-cap company announced a latest loss of US$340m on 31 December 2023 for its most recent financial year result. Many investors are wondering about the rate at which Lyft will turn a profit, with the big question being "when will the company breakeven?" In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Consensus from 37 of the American Transportation analysts is that Lyft is on the verge of breakeven. They expect the company to post a final loss in 2025, before turning a profit of US$58m in 2026. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 78%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won't go into details of Lyft's upcoming projects, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Lyft is its debt-to-equity ratio of 155%. Typically, debt shouldn't exceed 40% of your equity, and the company has considerably exceeded this. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Lyft, so if you are interested in understanding the company at a deeper level, take a look at Lyft's company page on Simply Wall St. We've also compiled a list of relevant aspects you should further research:

1. Valuation: What is Lyft worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Lyft is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Lyft's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.