LYFT vs. GRAB: Which Ride-Hailing Stock is a Stronger Play Now?

Lyft LYFT and Grab GRAB are well-known names in the Zacks Computer and Technology sector. Both companies provide ride-hailing services and have revolutionized the transportation industry with their innovative business models centered on ride-sharing.Grab is a leading provider of deliveries, mobility and digital financial services in multiple cities across eight countries in Southeast Asia: Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Lyft, headquartered in San Francisco, has a more focused strategy, operating primarily in the United States and concentrating mainly on ride-sharing.Given this difference in approaches and geographical focus of the two companies, let's examine closely to find out which one currently holds the edge, and more importantly, which might be the smarter investment now.The Case for LYFTLyft is benefiting from the increase in gross bookings. Gross bookings are improving mainly due to the growing active rider base, expansion into new markets and the success of the company’s customer-friendly "Price Lock" feature.Last month, Lyft released its first-quarter 2025 earnings report. In the March quarter, gross bookings increased 13% year over year to $4.6 billion. Management stated that this was the 16th consecutive quarter where Lyft demonstrated double-digit year-on-year growth in the key metric, demonstrating the resilience and momentum of the company’s customer-friendly strategy. For the second quarter of 2025, Lyft expects gross bookings in the $4.41-$4.57 billion range, indicating 10-14% growth from second-quarter 2024 actuals.  LYFT’s move to focus on less densely populated markets, such as Indianapolis, is paying off. Its Price Lock feature is also doing well. With the return-to-office mode gaining steam, there is a surge in weekday demand for ride-hailing services. To compete more effectively with rivals in the ride-hailing arena, Lyft has introduced a Price Lock feature. This feature allows users to bypass surge pricing during peak commuting hours. By locking in a commute price, they can save money.LYFT aims to gain a stronghold in the highly promising robotaxi market through strategic partnerships. By adopting this approach, Lyft has avoided the massive R&D costs associated with developing autonomous systems independently.Another area of confidence is LYFT’s buyback strategy. In a shareholder-friendly move, last month, management announced an increase to its share repurchase program to $750 million from $500 million. Lyft intends to utilize $500 million of this authorization within the next 12 months, $200 million of which will be used within the next three months. Strong cash flow generation allows LYFT to remain committed to returning value to shareholders. The company’s cash flow generation is approaching $1 billion for the trailing 12 months.The Case for GrabGrab's ability to adapt to local conditions is a key contributor to its success in Southeast Asia. Moreover, the company’s evolution from a taxi-hailing app into an "everyday everything app" offering various services, including food delivery, e-scooter rentals, and digital payments, is commendable and highlights its desire to expand.Grab is benefiting from strong growth in its On-Demand Gross Merchandise Value (“GMV”), expanding fintech offerings, and increasing user engagement across its platform. On-demand GMV refers to the sum of GMV of the mobility and deliveries segments. In the first quarter of 2025, On-Demand GMV increased 16% year over year. Grab expects 2025 revenues between $3.33 billion and $3.40 billion, indicating 19-22% year-over-year growth.Grab is strengthening its position across Southeast Asia by partnering with Amazon’s AMZN cloud computing platform — Amazon Web Services (“AWS”) — to drive growth in mobility, deliveries and financial services.In December 2024, Grab selected AWS as its preferred cloud provider to accelerate growth across its mobility, deliveries, and financial services verticals, including its digital banks. Grab has enhanced operational efficiency, reduced infrastructure costs and launched innovative services by utilizing AWS’ scalable, secure and cost-efficient cloud solutions.LYFT Outscores GRAB Concerning Price PerformanceOver the past three months, LYFT shares have gained 18.9%, outperforming not only GRAB but also its sector. GRAB shares have declined 2.8% in the same timeframe.Three-Month Price ComparisonImage Source: Zacks Investment ResearchLYFT Excels on the Valuation Front as WellLYFT is trading at a forward sales multiple of 0.88, much below the sectoral reading of 6.3. GRAB’s forward sales multiple sits at 5.02. LYFT  has a Value Score of B, while GRAB has a Value Score of F.LYFT’s P/S F12M vs. GRAB & SectorImage Source: Zacks Investment ResearchHow Do Estimates Compare for LYFT & GRAB?The Zacks Consensus Estimate for LYFT’s 2025 sales implies a year-over-year increase of 12.7%, and the consensus mark for earnings indicates 16.8% growth. The Zacks Consensus Estimate for LYFT’s 2026 sales implies year-over-year growth of 12.9%, and the consensus mark for earnings indicates 21.3% growth. The EPS estimates for 2025 and 2026 have been trending northward over the past 60 days.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for GRAB’s 2025 sales has risen 19.3% year over year, while the consensus mark for earnings indicates massive 267% growth. The Zacks Consensus Estimate for GRAB’s 2026 sales and earnings suggest 16.4% and 120% growth, respectively. The EPS estimates for fiscal 2025 and 2026 have been trending northward over the past 60 days, like LYFT.Image Source: Zacks Investment ResearchConclusionLYFT seems to have navigated the recent tariff-induced stock market volatility well, as reflected by its impressive price performance. Lyft is likely to continue benefiting from strong gross bookings. Lyft’s ambitions to be a key player in the lucrative and emerging autonomous vehicle market also bode well. The favorable valuation picture and rising earnings and sales estimates add to its appeal.The economic uncertainty in key Southeast Asia markets, driven by factors like inflation, changing consumer behavior, and supply-chain disruptions, is hurting Grab. Moreover, Grab faces intense competition in its deliveries segment. Southeast Asia’s fragmented regulatory landscape poses challenges. For instance, Indonesia’s push for local digital platforms could negatively impact Grab’s market share. Moreover, GRAB’s expensive valuation suggests the market has already priced in a best-case scenario. Until it proves it can sustain profitability and outpace regional competitors, betting on GRAB shares can be a risky proposition.On the basis of our analysis, LYFT emerges as a clear winner and seems a better pick than Grab now. LYFT currently carries a Zacks Rank #2 (Buy), while GRAB is has a Zacks Rank #3 (Hold) at present. 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(AMZN): Free Stock Analysis Report Lyft, Inc. (LYFT): Free Stock Analysis Report Grab Holdings Limited (GRAB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks