ABNB and CART show improved growth quality, while LYFT still needs investment to drive growth

Overview

This report compares ABNB, CART and LYFT across second-quarter results, third-quarter guidance, platform improvements and valuation. The core conclusion is that ABNB's and CART's platform upgrades have begun to improve growth and profitability, with some of the benefits coming from generative AI; while LYFT's third-quarter guidance is better, active riders are weak and customer acquisition investment has increased significantly, so the quality of growth still needs to be validated.

Core views

ABNB's nights growth rose to double digits and exceeded major online travel peers for the third consecutive quarter, with acceleration in North America and Europe, the Middle East and Africa, while Asia Pacific and Latin America continued to sustain faster growth. The company raised full-year revenue growth and adjusted EBITDA margin guidance, prompting Morgan Stanley to reassess its prior Underweight thesis, but valuation remains expensive relative to BKNG. CART's new users and spend per user jointly support orders and average order value, driving GTV to maintain low- to mid-teens growth; its AI assistant may further improve discovery, planning and purchase conversion. Its valuation remains at a discount to peers, so Equal-weight is maintained with a positive bias. LYFT's bookings and third-quarter guidance are resilient, but active riders were below expectations and marketing and administrative expenses were elevated, indicating that it has not yet proven its ability to deliver more organic rider and ride growth.

Analysis framework

The report compares actual second-quarter results with Morgan Stanley forecasts, assesses third-quarter and full-year guidance, and evaluates growth quality through regional growth, user metrics, unit economics and expense investment. For valuation, it uses P/E, EV/adjusted EBITDA, growth-adjusted multiples, peer comparisons and bull/bear scenario analysis.

Methodology notes

• Relative valuationEV/adjusted EBITDA and P/E

  Use forward earnings and cash earnings multiples to estimate target prices.

  CART's price target uses approximately 8x average adjusted EBITDA for 2027 to 2028; ABNB's price target uses approximately 22x average EPS over the same period; LYFT's price target uses approximately 7x average adjusted EBITDA over the same period.

• Peer comparisonGrowth-adjusted valuation

  Combine enterprise value multiples with expected growth rates to compare valuations across companies with different growth rates.

  At the $58 price target, CART's growth-adjusted adjusted EBITDA multiple is approximately 0.6x, about a 30% discount to the peer median; ABNB still enjoys a significant premium relative to BKNG.

• Scenario analysisBull, base and bear scenarios

  Form a target price range by adjusting revenue, margins and valuation multiples.

  ABNB scenario prices are $180, $125 and $90; CART's are $70, $58 and $35; LYFT's disclosed bull and base scenarios are $30 and $18, respectively.

• Fundamental analysisResults and guidance variance analysis

  Compare actual results, management guidance and analyst forecasts to identify changes in expectations.

  The report focuses on deviations versus forecasts in metrics such as nights, orders, GTV, active riders, adjusted EBITDA, margins and expenses.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• AIRBNB INC (US.ABNB)

  Core covered company

  Strengths

  Improvements in platform supply, user interface and payment options, with nights growth accelerating and outperforming online travel peers for three consecutive quarters; global leisure travel demand remains resilient.

  Weaknesses

  Its growth-adjusted valuation premium versus BKNG exceeds 100%, and expansion markets require continued investment.

  Comparison

  Nights growth has recently outperformed BKNG and EXPE, but adjusted EBITDA and EPS growth are still insufficient to fully support its valuation premium.

  Risks

  Insufficient high-quality supply, ADR reverting to pre-pandemic levels, intensified competition among online travel platforms, and execution in expansion markets falling short of expectations.

• INSTACART (MAPLEBEAR INC) (US.CART)

  Core covered company

  Strengths

  New users and spend per user support GTV growth, the advertising mix is improving, the AI assistant may lift average order value and shopping conversion, and valuation is discounted relative to peers.

  Weaknesses

  The U.S. grocery online penetration rate remains only around 11%, competition is intense, and spending trends among certain customer cohorts previously raised concerns about growth and share.

  Comparison

  The $58 price target implies an approximately 0.6x growth-adjusted adjusted EBITDA multiple, about a 30% discount to the peer median, with valuation close to sub-scale platforms such as EXPE and LYFT.

  Risks

  Slower online penetration of grocery consumption, deterioration in customer cohort behavior, advertising mix improvement slower than expected, and new investments weighing on profitability.

• LYFT INC (US.LYFT)

  Core covered company

  Strengths

  The high end of third-quarter bookings and adjusted EBITDA guidance was better than expected, and the analyst day highlighted multi-year ride growth, profitability improvement and advertising business opportunities.

  Weaknesses

  Active riders were below expectations, sales and marketing spending was significantly above expectations, and the platform still needs to rely on investment to drive growth.

  Comparison

  The target valuation is approximately 7x average adjusted EBITDA for 2027 to 2028, broadly in line with sub-scale internet platforms such as EXPE and CART.

  Risks

  Intensified competitive promotions, inability to grow riders and rides organically, advertising business execution falling short of expectations, and autonomous driving creating uncertainty for the long-term valuation of ride-hailing.

Key data

• ABNB second-quarter performanceNights were 2% above expectations, and adjusted EBITDA was 1% above expectationsSecond-quarter nights achieved double-digit growth, the fastest since the fourth quarter of 2024.
• ABNB full-year guidanceRevenue to grow at least in the mid-teens, with adjusted EBITDA margin of at least 35.5%Morgan Stanley's prior forecasts were 14% and 35%, respectively.
• ABNB price target$125Based on approximately 22x average EPS for 2027 to 2028; bull and bear scenarios are $180 and $90, respectively.
• CART second-quarter GTV$10.351 billion, up 14% year over year1% above Morgan Stanley's forecast; average order value was $115, 1.3% above forecast.
• CART forecast revisions2027 GTV raised by 1%, adjusted EBITDA raised by 2%Price target raised from $52 to $58, with the main text expecting upside of approximately 15%.
• CART valuationApproximately 8x average adjusted EBITDA of $1.6 billion for 2027 to 2028Equivalent to approximately 18x 2027 EPS, with the growth-adjusted multiple at about a 30% discount to the peer median.
• LYFT operating variancesActive riders were 2% below expectations, while sales and marketing expenses were 40% above expectationsG&A expenses were also 16% above expectations, but the high end of third-quarter bookings and adjusted EBITDA guidance was 3% and 10% above forecasts, respectively.
• LYFT price target$18Based on approximately 7x average adjusted EBITDA for 2027 to 2028; the bull scenario is $30.

Impact & implications

Investment opportunities in internet platforms are shifting from broad pursuit of growth to differentiation by growth quality. ABNB's supply, user experience and payment improvements support share gains, but its high valuation requires sustained growth acceleration. CART combines solid GTV growth, improving advertising mix, AI optionality and a valuation discount to peers, making its risk-reward relatively more attractive. If LYFT cannot grow riders and rides while reducing reliance on marketing, its valuation rerating potential will remain constrained.

Risks

• ABNB's recent growth acceleration may not be sustainable, and its high valuation premium faces compression.
• ABNB's expansion markets are more competitive and carry higher execution risk, while continued investment may pressure profits.
• If CART customer cohort spending or user growth weakens again, share and GTV growth may decline.
• The pace of U.S. grocery online penetration and improvement in CART's advertising revenue mix may fall short of expectations.
• If LYFT continues to rely on marketing and promotions to obtain growth, margin and cash flow improvement may be impeded.
• Commercialization of autonomous driving may change the long-term competitive structure and valuation framework for ride-hailing platforms.

What to watch

• Whether ABNB's third-quarter implied nights can sustain low-teens growth.
• Whether ABNB's regional nights growth advantage versus BKNG and EXPE can continue.
• Whether ABNB's full-year adjusted EBITDA margin can reach or exceed 35.5%.
• Trends in CART's new users, subscribers and spend per user.
• Usage, average order value and purchase conversion performance after CART's AI assistant is rolled out in North America.
• CART's advertising revenue share, take rate and logistics efficiency.
• Whether LYFT active riders and rides can grow while reducing reliance on promotions.
• LYFT's sales and marketing expenses, advertising business progress and underlying profitability excluding the advertising business.