02:01 PM EDT, 06/07/2024 (MT Newswires) -- Lyft's ( LYFT ) long-term financial targets didn't reflect "overwhelming beats" relative to market expectations, though there is potential for upside ahead, BofA Securities said Friday.

The ride-hailing company said at its investor day held Thursday that it expected 2027 gross bookings of about $25 billion, adjusted earnings before interest, taxes, depreciation, and amortization of $1 billion, and $900 million in free cash flow. Wall Street was looking for $22.5 billion, $753 million, and $614 million, respectively, according to BofA. Lyft ( LYFT ) projects achieving GAAP profitability "early" in its 2025-2027 plan horizon, according to a presentation.

The company's objectives didn't reflect "overwhelming beats, but we see upside ahead with greater efficiency, mobility tailwinds, and West Coast recovery driving near-term beats," BofA analysts Michael McGovern and Justin Post said in a note. "Lyft ( LYFT ) could also see (outsized) multiple expansion given lower rates."

BofA said Lyft's ( LYFT ) guidance suggests "limited increase" in competitive intensity. The company's outlook for a gross bookings compound annual growth rate of roughly 15% between 2024 and 2027 is largely in-line with rival Uber Technologies' ( UBER ) mid-to-high teens growth forecast, according to the note.

"We think some investors viewed Lyft's ( LYFT ) guidance as implying share gains, but we think it's based on an assumption that US mobility would be below-average growth compared to Uber's ( UBER ) other verticals, which we don't necessarily think is the case," the analysts wrote.

Lyft ( LYFT ) projects an adjusted EBITDA margin -- measured as a percentage of gross bookings -- at nearly 4% on a full-year basis in 2027. This translates to 7% incremental EBITDA margins on bookings through 2027, which BofA said is in-line with Uber's ( UBER ) outlook.

The brokerage upgraded its rating on the company's stock to buy from underperform "given attractive risk/reward" and raised its price objective to $20 from $15.

The company pegs 2027 Lyft Media gross bookings at more than $400 million, calling the platform a "profitability catalyst." The outlook reflects "rapid growth" from $50 million, according to BofA. "Lyft ( LYFT ) receives 3.3 million ride intents per day, with only 2 (million) converted to rides, but conversion is improving as rides growth is outpacing intents growth and the significant amount of intents drives consumer ad opportunities," McGovern and Post wrote.

The brokerage expected the company to announce foray to new geographies, but said its management doesn't project any "considerable" expansion into international markets beyond Canada, according to the note. "We also note there were relatively few updates on bikes/scooters and relatively limited new announcements on (autonomous vehicles)."

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