Lyft (NASDAQ:LYFT) shares fell more than 2% in premarket trading on Monday as investment firm Gordon Haskett downgraded the ride-sharing firm, citing the stock’s near 58% move since the start of the year as well as its preference for Uber Technologies (NYSE:UBER).
Analyst Robert Mollins lowered his rating on Lyft (LYFT) to hold from buy, while cutting the per-share price target to $19 from $24, citing worries about active riders falling below estimates, which could lower the firm’s revenue growth.
Mollins lowered his 2023 and 2024 estimates on Lyft (LYFT), cutting his revenue forecast to $4.7B and $5.2B, down from $4.9B and $5.6B, and EBITDA estimates fell to $535M and $727M from $650M and $906M.
In addition to worries over active rider estimates, Mollins noted that while Lyft (LYFT) has made “meaningful progress” on reducing quoted wait times, the company may see negative impact from using higher prices to attract drivers, as it could cede market share to Uber (UBER).
Mollins also said that if the regulatory environment were to shift against gig companies, Lyft (LYFT) would be more disadvantaged than Uber (UBER), “given its predominately US-based business model.”
Last month, Uber (UBER) and Lyft (LYFT) scored a key regulatory win as a New York court blocked a potential rate hike from New York City’s Taxi and Limousine Commission.
Investment firm KeyBanc Capital Markets recently upgraded Lyft (LYFT), citing recent data for the ride-sharing firm that suggests it may be more profitable in 2023 than investors expect.
Analysts are largely bullish on Lyft (LYFT). It has a HOLD rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha’s quant system, which consistently beats the market, rates LYFT a HOLD.