We recently compiled a list of the 10 Best Delivery Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Lyft Inc. (NASDAQ:LYFT) stands against the other delivery stocks.

The growth of global e-commerce is linked to a surge in demand for delivery services. According to research by environmental organization Stand.earth, global e-commerce is anticipated to grow at a rate more than twice that of in-store purchases. It is anticipated that by the end of this decade, 25,000 parcels will be shipped per second. The rise in global e-commerce has also produced a change in people’s shopping behaviors around the world. Online shopping accounts for about 15% of all American purchases, with an estimated yearly value of $1 trillion, as reported by Bloomberg.

ParcelHero projects that the global delivery and courier market will reach $648 billion by 2030, expanding at a compound annual growth rate (CAGR) of 4.31%, driven by improved logistics technologies and e-commerce. The market was valued at $482.9 billion in 2023, representing a 2.5% annual growth rate with a 5% growth from 2018 to 2023. The UK market is projected to reach $32 billion by 2030, with a compound annual growth rate (CAGR) of 6.22% from its 2023 valuation of $20.97 billion. The transportation management systems market is anticipated to surge by 19.7% from its 2023 valuation of $13.5 billion to $33.3 billion by 2028. Innovations in technology, such as tracking, automation, and AI-powered logistics, will boost productivity and accommodate growing package volumes.

Shipping and delivery times remain a key concern for customers. Recent data from Digital Commerce 360 and Bizrate Insights reveal that customers have remained committed to giving free and quick shipping top priority while placing online shopping in 2024. According to a survey of 1,013 online buyers, 81.34% of them rank free shipping as their main concern when receiving deliveries. Next in line is fast shipping, which was highlighted by 68.41% of respondents. Furthermore, 55.68% of customers stressed how important it is for merchants to maintain inventory and shipping readiness.

The demand for food delivery services has also increased dramatically as a result of the COVID-19 outbreak. Restaurants had to rely more on outside delivery services to stay afloat since dine-in options were shut down or severely restricted in many areas of the United States. Additionally, online grocery delivery and pickup services flourished as customers avoided going to stores. According to Bloomberg, online restaurant ordering accounted for about 40% of total restaurant sales in 2023, just over $22.4 billion in 2021, and has grown 300% faster than dine-in sales since 2014. CB Insights forecasts that the food delivery market size will grow to $320 billion by 2029.

In addition, drone technology is increasingly being used across the US, with leading companies providing faster delivery services, particularly for short-distance shipments. As per McKinsey, drone delivery services are expanding, with over 800,000 paid commercial deliveries globally by 2023. According to the firm’s most recent projections, the total addressable market in the United States alone is predicted to reach $5 billion by 2035, with an estimated 1.5 billion deliveries annually. Therefore, drone delivery is one of the first commercialized sectors of the larger future air mobility market, which also includes other platforms that use new aircraft, like urban and regional air mobility, as well as other commercial drone use cases, such as inspection or surveillance.

Even though drone deliveries are not yet widely available, 83% of consumers in six countries who participated in a McKinsey survey were aware of them. India leads at 92% and the U.S. comes in last at 53%, with 76% of respondents saying they would be willing to switch, reflecting a 19% growth from 2021. With 35% willing to pay up to 1.5 times more, 58% of respondents are willing to pay a premium. The most preferred use case is express shipping (56% are willing to switch), which is followed by food and medical delivery. Urban residents (80%) and frequent consumers (68% prepared to pay more for food delivery) have the highest adoption potential. Finally, operators should put speed and convenience first because 20% of customers currently pay for expedited shipment, showing that there is a high demand for faster alternatives.

A ridesharing passenger and driver in a car, looking out the window in anticipation of their destination.

Our Methodology

For this article, we scanned Insider Monkey’s Q4 2024 proprietary database of billionaires’ stock holdings and identified delivery stocks from the list. These companies are involved in logistics, shipping, and last-mile delivery services. From there, we picked the top 10 stocks with the highest number of billionaires having a stake in them. Where two or more stocks were tied on billionaire sentiment, we used the dollar value of billionaire holdings as a tiebreaker between them.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Lyft Inc. (NASDAQ:LYFT)

Number of Billionaires: 11

Billionaire Holdings: 746,423,169 

Lyft Inc. (NASDAQ:LYFT) is among the Best Delivery Stocks and the second-biggest ride-sharing service provider in the US and Canada by using the Lyft app to link drivers and passengers. Founded in 2013 and going public in 2019, it provides a range of private automobile trips, including premium, shared, and standard private rides. To provide users with multimodal transportation options, the firm has ventured into the bike and scooter-sharing market in addition to ride-sharing. Its alliances with emerging AV startups such as May Mobility, Mobileye, and Nexar pave the way for future, more beneficial AV alliances.

Lyft Inc. (NASDAQ:LYFT) hit important milestones in 2024, with drivers earning roughly $9 billion, the most in the platform’s history. By recording the fastest average ETAs in the business and cutting pickup times by about a minute over the previous year, the company improved customer service levels. A large cut of Primetime (surge pricing) resulted in savings for riders of almost $400 million. Furthermore, the company produced $766 million in positive free cash flow and became profitable under GAAP for the first time. Lyft Black and Lyft SUV rides jumped by 41% year over year, while rides rose 15% and active users grew 10% in Q4, showing an expansion of high-margin services.

The business also revealed intentions to pay back convertible notes that are due in May 2025 and a $500 million share buyback program, showing its sound financial standing and dedication to increasing shareholder value.

Overall, LYFT ranks 8th on our list of the Best Delivery Stocks to Buy According to Billionaires. While we acknowledge the potential for LYFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LYFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stock To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.