Analysts’ Views on Lyft Stock after Lock-In Expires


Aug. 23 2019, Updated 2:04 p.m. ET

A major sell-off in Lyft (LYFT) stock was expected after its lock-in period ended on August 19. After this date, insiders, including management, employees, and pre-IPO investors, are allowed to dispose of their stock. However, the stock fell just 1.5% on Monday.

Lyft had initially set the lock-in expiration for September 24. However, the company disclosed on August 7 that it had preponed the expiration to August 19. The company moved the date because the original one fell within its quarterly blackout period, during which stock cannot be traded.

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Why investors are optimistic

Lyft’s recent performance seems to have impressed investors. In the second quarter, its revenue grew 72% YoY (year-over-year) to $867.3 million, driven by its active rider count rising 41%. The company’s adjusted loss per share was $0.68.

Lyft beat analysts’ expected revenue of $809.27 million and adjusted loss per share of $1.74. The company also raised its guidance based on improved market conditions and sales and marketing efficiencies. This year, it expects its revenue to grow 61%–62% to $3.47 billion–$3.5 billion. The company had previously expected 52%–53% revenue growth.

Lyft now expects an adjusted EBITDA loss of $850 million–$875 million this year, better than its previous EBITDA loss forecast of $1.15 billion–$1.175 billion.

Unlike Lyft, Uber (UBER) disappointed investors with its second-quarter results. During the quarter, its revenue rose 14% to $3.17 billion. However, its loss per share worsened YoY, to $4.72 from $2.01. The company missed analysts’ forecast of sales of $3.36 billion and an adjusted loss per share of $3.12.

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Do analysts see upside in Lyft stock?

Most analysts covering Lyft are bullish about the stock. As of yesterday, 21 (60%) of 35 analysts recommend “buy,” two recommend “sell,” and 12 recommend “hold.” Several analysts raised their price target for Lyft stock following the company’s strong second-quarter results. On August 8, Wedbush upgraded its rating for Lyft stock to “outperform” from “neutral,” and raised its price target to $75 from $67. Other price target increases for Lyft stock include:

  • D.A. Davidson: $74 from $72
  • SunTrust Robinson Humphrey: $75 from $68
  • Evercore ISI: $81 from $74
  • Credit Suisse: $96 from $95
  • Piper Jaffray: $79 from $78
  • Cowen: $84 from $78
  • RBC: $76 from $72
  • Canaccord Genuity: $78 from $75

In contrast, the Zephirin Group lowered its price target to $91 from $97.

As of yesterday, Lyft stock was 34.4% lower than its IPO price in March. Analysts’ average price target of $75.13 for Lyft stock implies an upside of about 46%.

In comparison, Uber stock has fallen 18.2% since its May IPO. Most (21, or 62%) of the 34 analysts covering Uber recommend “buy.” Meanwhile, 12 recommend “hold” and one recommends “sell.” Their 12-month target of $51.47 for Uber stock implies an upside of about 51%.

Investors are anxious about Lyft and Uber turning profitable, given the rising competition in the ridesharing space. Lyft considers 2019 to be its peak investment year. In Lyft’s second-quarter conference call, CFO Brian Roberts indicated that the company expects its adjusted EBITDA loss to shrink YoY in 2020.


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