Jon Hadad

About the Author Jon Hadad

Jon Hadad graduated from the University of Delaware with a degree in political science. Prior to joining the Smarter Analyst team, he was an industry analyst at a New York research firm.

Last Minute Thought: Buy or Sell Lyft Stock Before Q1’19 Earnings?


Lyft’s (LYFT) stock market debut has been far from a smooth road, with shares of the ride-sharing company down 20% since its March IPO. Many of Lyft’s stock market troubles is timing, as rival Uber is soon to go public, giving investors the opportunity to invest in similar company that is generates significantly more revenue, is geographically more widespread and has more streams of revenue. But with Lyft releasing its first-quarter earnings in just a few minutes, the company will get its first chance to show investors this is the horse to bet on.

Wall Street is expecting surging growth, and while also expecting a growing loss. Consensus has revenue at $740.2 million, an 86% increase this last year, with EPS at ($1.81) per share — with ranges from ($4.73) and ($0.63). Bottom line, though estimate vary, Wall Street expects Lyft to continue operating at a loss.

Ahead of the print, Wedbush analyst Daniel Ives remains Neutral on the stock, lowering his price target to $67 (from $80), which implies nearly 14% upside from current levels. (To watch Ives’ track record, click here)

While earnings will be a big factor in investor sentiment, Ives’s eyes are set on Uber. The analyst lowered his price target “based primarily on more conservative take rate analysis in light of Uber’s latest metrics/targets,” referring to the commission Lyft receives from it’s rides. But this isn’t a surprise for Ives, as he “anticipated that LYFT shares would come under pressure as investors…had been worried that Uber’s S-1 and roadshow could be a dark shadow over Lyft’s stock in the near-term.”

As a result of the timing, the analyst believes “many investors have taken a wait and see approach, and not putting real money to work in [Lyft] but rather waiting” on Uber and Lyft’s earnings release.

But while Ives and many investors are waiting before committing, the analyst did have positive words for the Lyft brand. He says, “the brand loyalty of Lyft has been quite impressive as the company continues to attract drivers and riders with its brand associated with corporate responsibility and social values, an impressive formula that will be in focus when the company reports results.” Ives cites this is a strong point for the company, but still remains neutral as he takes in more information.

Bottom line

To this point, Lyft has struggled to win over Wall Street. But perhaps this is a result of bad timing, and being the first US ride-hailing company to go public, which contributes to investors’ desire for more information. But TipRanks analysis shows the analyst community is actually excited on Lyft stock. Out of 20 analyst polled in the last 3 months, 13 recommend Buying, six saying Hold and one suggesting Sell. The price target among these analysts stand at $73.25, which represents nearly 25% increase from current levels. (See LYFT’s price targets and analyst ratings on TipRanks)

 

Read more: Lyft (LYFT) Stock Looks Like It Can Rally Back to $78, Says Analyst

 

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