"Let's not sugarcoat it; Lyft's stock has been a head-scratching train wreck since the IPO," said Dan Ives, managing director at Wedbush Securities. "The first quarter coming out of the box for any company is so important after going public, but for this one it is incrementally a key factor, just given Street fears. It is unusual for the bloom to come off rose so quickly, and that is why it is such a prove-me quarter."One thing no one expects is a profit.
With investors expecting the losses to mount, the focus will be on a limited set of growth metrics: the top-line , active riders and revenue per rider. But even in maintaining its $85 price target, it is expecting investors to be wary. "It may take a quarter or two for investors to be comfortable with market rationalization, but we believe Lyft's multiple will expand when that occurs; a rational market lessens competitive fears and makes lapping 2018's tough comps easier," Raymond James analysts wrote.
Cowen analysts think the pullback is "overdone" and Lyft's valuation is attractive; it has a price target of $77. "Lyft has less flexibility than investors first thought, thought even a month ago. When Uber went from 80 cents to 60 cents in LA [right before the Lyft IPO], that was a big shot across the bow. The Uber business model is strong enough and broad enough in terms of 90-million-plus active riders, they can withstand a little more pressure on the model."
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