With the business potentially at an important milestone, we thought we'd take a closer look at Lyft, Inc.'s (NASDAQ:LYFT) future prospects. Lyft, Inc. operates a peer-to-peer marketplace for on-demand ridesharing in the United States and Canada. With the latest financial year loss of US$340m and a trailing-twelve-month loss of US$65m, the US$5.5b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Lyft's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

According to the 39 industry analysts covering Lyft, the consensus is that breakeven is near. They expect the company to post a final loss in 2024, before turning a profit of US$17m in 2025. Therefore, the company is expected to breakeven just over a year from now. 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 64%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Lyft's growth isn't the focus of this broad overview, however, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there's one issue worth mentioning. Lyft currently has a debt-to-equity ratio of 174%. Generally, the rule of thumb is debt shouldn't exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Lyft to cover in one brief article, but the key fundamentals for the company can all be found in one place – Lyft's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

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.