As LYFT Inc starts trading, many Wall Street analysts are recommending to buy the stock. Below are the comments form analysts.
We are initiating coverage of Lyft, Inc. (LYFT) with a Buy rating and a $68 target price.
Dan Loeb's Third Point returned 11% in its flagship Offshore Fund and 13.2% in its Ultra Fund for the first quarter. For April, the Offshore Fund was up 1.7%, while the Ultra Fund gained 2.3%. The S&P 500 was up 6.2% for the first quarter, while the MSCI World Index gained 5%. Q1 2021 hedge Read More
Leading U.S. Ridesharing Company Focused on the Future of Personal Mobility: Lyft, Inc. is a multi-modal transportation company operating in the United States and Canada. Lyft’s core business is its peer-to-peer marketplace for on-demand ridesharing, which has made the company a driving force of disruptive trends in consumer transportation. Lyft launched in 2012 and is headquartered in San Francisco, CA. The company generates revenue primarily from its ridesharing platform, and also offers alternative transportation options, including bikes and scooters, as well as a growing number of additional services for drivers. Lyft estimates its ridesharing marketplace is available to over 95% of the U.S. population ........
We initiate coverage of Lyft Inc. (LYFT) with an Outperform rating and a $95 target price.
Ride sharing tapping into a large and underpenetrated market: Lyft offers the consumer the option to rent transportation capacity on an as needed basis, which marks all of annual personal consumption dollars as defined by the US Dept. of Commerce and the Bureau of Economic Analysis at $1.2t for disruption. Even as we narrow that down to urban (80% of total) and 18+ age (74%) users, we arrive at a near-to-medium term Total Addressable Market (TAM) of $745b, which based on our calculation of bookings from Lyft and its nearest competitor for 2018 suggests sub-4% penetration.
We think Lyft has the hallmarks of an attractive long-term growth investment, including a large market opportunity with an attractive duopoly industry structure, a strong value proposition that should get better with scale, and a business model that holds solid room for upside.
Large market with room for growth and duopoly structure: US consumers spend about $1.3 trillion on transportation annually, and nearly 90% of that is related to personally owned vehicles that sit idle ~95% of the time. So far, ridesharing accounts for only ~2% of US consumer transportation spending, but this should expand dramatically in coming years. Meanwhile, the duopoly market structure is attractive, and our study (within) of other notable duopolies (UPS vs. Fedex, Boeing vs. Airbus, AT&T vs. Verizon) shows that once relative market shares are largely established, they can stay stable along with price levels for many years.
Initiating coverage with a Buy rating and $86 PT. Lyft has become a strong #2 in the U.S. ridehailing market as rev grew 103%, take rate +370 bp, and EBITDA mgn +2200 bp in '18. However, stock is down ~15% since the IPO on negative sentiment due to concerns over ongoing losses and competition from Uber. This has driven valuation to the bottom 1/5 of its peer group, despite growth in top 1/5. We expect stock to recover as Lyft executes and misconceptions clear.
Lyft achieved impressive momentum in the last 2 yrs, with bookings >4x, rev >6x, take rate ~900 bp, and market share ~2x. We believe its outsized 39% share in a duopoly is durable, with plenty of runway left in a market that is only 1% penetrated (in miles driven).