ABNB and CART show improved growth quality, while LYFT still relies on spending to drive growth

Overview

The report reviews the second-quarter results and subsequent guidance of ABNB, CART and LYFT. ABNB saw faster nights booked growth, driven by supply, user experience, payment choices and leisure travel demand; CART maintained healthy GTV growth, driven by new users, user spending and improved average order value, with its AI shopping assistant providing additional optionality; while LYFT delivered better bookings and third-quarter guidance, its shortfall in active riders and above-expected marketing and administrative expenses suggest that the quality of its growth remains to be validated.

Core views

The three companies show a differentiated pattern of “ABNB’s growth algorithm improving, CART delivering steady growth with AI upside optionality, and LYFT relying on spending to drive growth.” ABNB has posted nights booked growth above online travel platform peers for a third consecutive quarter, with full-year revenue growth and margin guidance raised, which could support a rerating of its valuation logic, but its growth-adjusted valuation premium relative to BKNG remains high. CART’s online grocery market penetration is low, valuation is not high relative to peers, recent user and average order value performance is healthy, and its AI assistant may improve discovery, planning and purchase conversion. To earn a higher valuation, LYFT needs to prove that it can expand riders and rides in a more organic way and ease the pressure from autonomous driving on the long-term valuation of the ridesharing industry.

Analysis framework

The report combines earnings surprises, management guidance, user and transaction operating metrics, regional growth rates, expense investment, earnings estimate revisions and peer valuations, and uses P/E ratios, enterprise value to EBITDA multiples, growth-adjusted multiples and bull/bear scenario analysis to derive price targets.

Methodology notes

• Relative valuationEnterprise value to EBITDA multiple method

  Calculate enterprise value based on forward adjusted EBITDA and peer valuation multiples.

  CART’s $58 price target uses about 8x average 2027–2028 adjusted EBITDA of about $1.6 billion; LYFT’s $18 price target uses about 7x average adjusted EBITDA over the same period.

• Relative valuationP/E valuation method

  Estimate equity value by combining forward earnings per share with a target P/E multiple.

  ABNB’s $125 price target is primarily based on about 22x average 2027–2028 EPS of about $5.66, corresponding to about 12x 2027 adjusted EBITDA.

• Peer comparisonGrowth-adjusted valuation comparison

  Combine valuation multiples with expected earnings growth to compare platform companies with different growth levels.

  CART’s price target corresponds to about 0.6x growth-adjusted EBITDA multiple, about a 30% discount to the peer median; ABNB still has a high growth-adjusted valuation premium relative to BKNG.

• Scenario analysisBull, base and bear scenarios

  Estimate a price range through different revenue, margin and valuation multiple assumptions.

  ABNB’s bull, base and bear prices are $180, $125 and $90, respectively; CART’s are $70, $58 and $35, respectively; LYFT has disclosed a $30 bull case and an $18 base case.

Asset mapping & comparison

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

• ABNB

  Growth improving but valuation still elevated

  Strengths

  Nights booked accelerated, outpacing online travel platform peers for three consecutive quarters; regional growth improved broadly; full-year revenue and margin guidance was raised.

  Weaknesses

  Forward growth depends on investment in new markets, with higher execution risk; growth-adjusted valuation still has a significant premium relative to BKNG.

  Comparison

  Compared with BKNG, ABNB’s current growth-adjusted valuation premium exceeds 100%, while BKNG’s adjusted EBITDA and EPS growth are faster.

  Risks

  Insufficient high-quality supply, normalization of average daily rates, online travel platform competition and increased advertising investment may pressure growth and margins.

• CART

  Solid fundamentals with AI upside optionality

  Strengths

  New users and user spending drove healthy GTV growth; average order value was better than expected; advertising business mix improved; valuation is not high relative to peers.

  Weaknesses

  Online grocery competition is intense, and historical consumption trends among some customer cohorts still raise concerns about growth and share.

  Comparison

  The $58 price target corresponds to about 0.6x growth-adjusted EBITDA multiple, about a 30% discount to the peer median, and is close to smaller-scale platforms such as EXPE and LYFT.

  Risks

  Slower-than-expected migration of offline grocery to online, insufficient improvement in advertising revenue mix, new investments weighing on profitability, and weaker-than-expected commercial impact from the AI assistant.

• LYFT

  Good near-term guidance but weaker growth quality

  Strengths

  Second-quarter gross bookings were better than expected, and the high ends of third-quarter gross bookings and adjusted EBITDA guidance were both above Morgan Stanley forecasts.

  Weaknesses

  Active riders were below expectations, sales and marketing and administrative expenses were significantly above expectations, and growth is highly dependent on promotions and spending.

  Comparison

  Target valuation is about 7x average 2027–2028 adjusted EBITDA, broadly in line with smaller-scale Internet platforms such as EXPE and CART.

  Risks

  Intensifying ridesharing competition, persistently high customer acquisition costs, insufficient organic rider growth, and pressure from autonomous driving technology on long-term industry valuation.

Key data

• ABNB second-quarter surpriseNights booked 2% above expectations, adjusted EBITDA 1% above expectationsSecond-quarter nights booked achieved double-digit growth, the fastest since the fourth quarter of 2024.
• ABNB full-year guidanceRevenue to grow at least in the teens percentage range, adjusted EBITDA margin at least 35.5%Both are above Morgan Stanley’s prior forecasts of about 14% revenue growth and a 35% margin.
• CART second-quarter GTV$10.351 billion, up 14% year over yearAbout 1% above the $10.252 billion expectation.
• CART second-quarter average order value$115About 1.3% above the $113 expectation.
• CART price target$58Raised from $52, with the report body estimating about 15% upside.
• CART valuation basisAbout 8x average 2027–2028 adjusted EBITDAAverage adjusted EBITDA of about $1.6 billion, corresponding to about 18x 2027 P/E.
• LYFT operating and expense deviationsActive riders 2% below expectations, sales and marketing expense 40% above expectationsAdministrative expenses were also 16% above expectations, reflecting competitive and growth investment pressure.
• High end of LYFT third-quarter guidanceGross bookings 3% above expectations, adjusted EBITDA 10% above expectationsNear-term guidance is positive, but organic growth capability still needs validation.

Impact & implications

ABNB and CART’s results show that platform product improvements, data capabilities and generative AI tools may simultaneously enhance user growth, transaction activity and margins, and the market may reassess the sustainability of their long-term growth. CART has a relatively better risk-reward profile due to its valuation discount and AI application optionality, but it remains necessary to observe whether user cohort spending behavior can continue to improve. ABNB’s growth acceleration weakens the original bearish thesis, but its high valuation premium limits upside. LYFT’s high marketing spend indicates that competitive pressure remains significant; if it cannot prove organic growth in riders and rides, valuation expansion may be constrained.

Risks

• Weakening macro leisure travel demand may undermine ABNB’s nights booked and average daily rate growth.
• Returns on ABNB’s investment in expansion markets are uncertain, and online travel platform competition may intensify.
• Although the U.S. grocery market where CART operates is about $1.8 trillion in size and online penetration is only about 11%, there are many competitors with strong capital resources.
• If CART user spending, advertising business mix or AI assistant adoption falls short of expectations, growth and valuation may be pressured.
• LYFT’s continued reliance on marketing and promotions to acquire growth may limit margin improvement.
• The development path of autonomous driving may change the long-term competitive landscape and valuation center of ridesharing platforms.
• Price targets are highly dependent on 2027–2028 earnings forecasts and valuation multiples, and estimate cuts would significantly affect risk-reward.

What to watch

• Whether ABNB third-quarter nights booked can maintain low-double-digit growth against a higher comparison base.
• The sustainability of ABNB’s growth improvement and changes in ratings and earnings estimates after the model review.
• Subsequent trends in CART new users, subscribers, user spending and average order value.
• Usage rate, order value and incremental GTV contribution of CART’s AI assistant after rollout in North America.
• Whether CART advertising revenue mix, logistics efficiency and transaction monetization rate can continue to improve.
• Whether LYFT active riders and rides can shift toward more organic growth.
• Changes in LYFT sales and marketing expense ratio and adjusted EBITDA margin.
• The impact of autonomous driving competition on long-term growth and valuation multiples for ridesharing platforms.