Analyst: Uber Roadshow A 'Dark Shadow' Over Lyft

Lyft Inc LYFT is off to a rough start on the public market, but one analyst says things could get even worse in the near term.

The Analyst

Wedbush analyst Daniel Ives reiterated his Neutral rating and $80 price target for Lyft.

The Thesis

Ives says Lyft’s larger competitor Uber will likely cash a “dark shadow” over Lyft stock when its S-I filing becomes public and it begins its IPO roadshow.

“The primary issue is around the underlying metrics that Uber will discuss around take rates, ride sharing data, driver ecosystem, and a myriad of other metrics relative to Lyft which may put the company in a more negative light,” Ives wrote in the note.

Ives likes Lyft’s position as the No. 2 player in a potentially $1 trillion ridesharing industry, but the stock is a risky bet given the company’s unproven path to profitability and lack of publicly traded comps to support its valuation.

After the initial wave of post-IPO buying, Ives says potential Lyft investors are likely now waiting on the sidelines to see if the grass is greener with Uber.

In the longer term, Ives is bullish on Lyft as long as the company can keep delivering the level of impressive growth it reported in its own S-1 filing. It’s too early to judge Lyft’s business or its stock at this point given the company’s massive opportunities, according to Ives.

Price Action

Lyft's stock traded higher by 2 percent Thursday to $61.12 per share, still well below its $72 IPO price.

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