To The Moon

Buybacks are one of the most underappreciated ways companies can generate value for shareholders. A well-executed buyback can rapidly reduce the denominator in earnings per share, but the timing and pace of the buyback are important.

Most buybacks are done when stock prices are high and business is good.

Effective buybacks are executed when valuations are low and before the market “re-rates” the stock (i.e., increases the multiple). If that’s when the buyback is done, it can be rocket fuel for a stock.

Here are 4 stocks I own that need to announce large buybacks today, ahead of potential turnarounds in their businesses.

1. $Lyft, Inc.(LYFT)$ ( ▼ 0.58% )

2. $Duolingo, Inc.(DUOL)$ ( ▲ 0.03% )

3. $Mobileye Global Inc.(MBLY)$ ( ▼ 2.93% )

4. $MGM Resorts International(MGM)$ ( ▲ 0.46% )

1.Lyft

The most obvious buyback on this list is Lyft.

• Market Cap: $5.89 billion

• Net Cash: $344.1 million

• Free Cash Flow (ttm): $1.12 billion

To be clear, Lyft is buying back stock. The company bought back $300 million in stock in the first quarter of 2026 and has $950 million more authorized in a buyback plan. But there’s no reason to be slow with a buyback here.

I think the company can be aggressive in two ways.

Step 1: Reduce dilution from stock-based compensation, which has long been a problem for Lyft.

Step 2: Spend more of the net cash and free cash flow to buy back stock. An accelerated share buyback plan of the full $950 million could be completed this summer, and another $1 billion could be authorized to be completed over the next two years. That’s similar to what $General Motors(GM)$ did in 2023, and the company both bought back significant shares and the stock more than doubled since that first major buyout was announced.

GM was a cheap stock with lots of free cash flow, just like Lyft, but it also hasn’t grown much in years. Lyft is growing at a nearly 20% clip, so a re-rating of the stock could be an accelerant if the share count is cut significantly.

This is a cash-generating machine with a cheap stock trading for just 4.7x forward free cash flow estimates. Now is the time to be aggressive, and I don’t think sitting on a huge cash pile is going to give Lyft any advantages in a world of autonomy.

2.Duolingo

Duolingo also has a buyback program, but it’s a baby. The company authorized its first major buyback program earlier this year, and it was for a measly $400 million. I think it could announce a $2 billion buyback plan over the next 2 years!

• Market Cap: $6.24 billion

• Net Cash: $1.25 billion

• Free Cash Flow (ttm): $426 million

There’s no reason Duolingo needs to have $1.25 billion in cash on hand. It’s not carrying big liabilities or inventory. There’s no capex build-out ahead.

This should be a company that can operate with some leverage. With $416 million in free cash flow and growing, the company could afford to have $1 billion in debt and easily manage it.

If management really thinks Duolingo’s business will turn around over the next 3 years and $700 million in free cash flow is possible, they should cut the shares outstanding quickly.

The stock is gaining momentum, so time may already be running out.

3.Mobileye

If Mobileye indeed has $24.5 billion in the revenue pipeline over the next 8 years (implying an averaging over $3 billion in revenue, a 50% jump from today), then this stock is incredibly cheap, and management should use some of its dry powder to buy back stock.

Note: It should absolutely not do more acquisitions like the highly questionable Mentee Robotics deal.

• Market Cap: $7.8 billion

• Net Cash: $1.3 billion

• Free Cash Flow (ttm): $473 million

Investors may think Mobileye’s business is uncertain because there are a lot of questions to answer in autonomy, but the core is advanced driver assist systems for vehicles on the road today, and big wins with VW and “a major U.S. OEM” give the company visibility into the future.

What’s not being appreciated is the upside in higher levels of autonomy.

Mobileye is one of a small group of companies that have done Level 4 autonomy testing in the U.S. and Europe and recently announced plans to vertically integrate, offering an autonomous vehicle itself.

Like Duolingo, if management really thinks the future is bright, they should cut the share count quickly. Intel owns a big stake in Mobileye and holds a lot of the shares, reducing float, so a buyback isn’t straightforward. But even Intel has an incentive to get the share price back up and buying 25% of shares outstanding in the next two years isn’t impossible.

4.MGM Resorts

Finally, a company that’s buying back stock, but could be extremely aggressive if it wanted to be.

• Market Cap: $11.8 billion

• Net Cash: ($3.85 billion)

• Free Cash Flow (ttm): $1.55 billion

MGM is more complicated than the headline numbers because of its non-100% ownership of MGM China, MGM Japan, and BetMGM. The general story is that the company has consistent cash flow coming in and a reasonable amount of debt.

In fact, with just $3.8 billion in domestic debt and about $2.1 billion in annual adjusted EBITDA (after paying rent) in the U.S., there’s the ability to lever up even more if management wants to.

Here’s the reason to do it now. If management takes out another ~$2 billion in debt to buy back stock, they could cut the share count by 20% with those funds and some buybacks with cash from operations over the next year or two.

At the same time, they have enough money to fund the ~$350 million needed this year for MGM Japan and another ~$2 billion needed before the project opens in 2030.

The future growth is the reason to do the buyback now. MGM Japan could generate $3 billion in adjusted EBITDA on a construction cost of $10 billion. MGM could make its investment back in 2-3 years if all goes well.

And what would the company be worth then? $30 billion? $40 billion?

A ~42% stake in the MGM Japan project alone could be worth MGM’s entire market cap today.

Buy back as many shares as possible before the market figures out MGM Japan exists!

That’s what Barry Diller is trying to do. Management should beat him to it!