The first round of Lyft analyst notes is bullish on the newly public ride-hailing company as brokerages across Wall Street clamor to recommend what one described as “the future of human transportation.”
Though each analyst presented a unique interpretation of Lyft’s business, most emphasized a large, global marketplace, a short list of competitors and a compelling valuation following early stock underperformance.
The flood of brokerage literature follows a quiet period after Lyft’s initial public offering on March 29, when it started trading at $72. Such quiet periods are designed to prevent underwriters and investment banks from using potentially confidential information commenting on a security.
The stock has since pulled back and closed Monday at $60.94, down more than 15% from its IPO price. It was flat in midmorning trading Tuesday after rising more than 2% in the premarket.
Credit Suisse analyst Stephen Ju, who initiated coverage with an…
outperform rating and $95 price target, told clients not to worry about short-term stock moves and focus on the company’s strong fundamentals.
“Lyft offers the consumer for the first time in history the option to rent transportation capacity on an as-needed basis,” Ju wrote. “As Lyft’s stated goal is to offer that Transportation as a Service platform, the addressable market of $1.2 trillion in US transportation spend does seem appropriate over the longer term.”
Piper Jaffray gave a bold title to its note, calling the company a “vehicle for change in the future of human transportation.”
Here’s a wrap of all the major analyst opinions.
“Our bull thesis is driven by: 1) Secular growth toward Transportation-as-a- Service that supports Lyft’s projected 32% revenue CAGR through 2021. We believe ridesharing’s penetration of both miles traveled and addressable transportation spending is in the low-mid single-digits and Lyft has dual growth levers in Active Riders and Revenue per Active Rider; 2) Lyft’s founders’ singular focus on consumer transportation, undistracted by other industries and adjacencies; 3) Lyft’s history of innovation across Shared Rides, Express Pay, commercial AV, and other offerings; 4) Our view that ridesharing will be profitable as the industry scales and becomes more rational over time.”
“Similar to what is already happening for enterprises and cloud adoption, Lyft offers the consumer for the first time in history the option to rent transportation capacity on an as-needed basis versus incurring the upfront costs of vehicle ownership and ongoing costs of maintenance, insurance, and gas. And as Lyft’s stated goal (and similarly for all ride sharing platforms) is to offer that Transportation as a Service platform, the addressable market of…
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