Lyft shares have been on a skid, and one wonders if a surge of bullish notes and sentiments from Wall Street’s sell-side will be enough to steady the steering.
At this writing, shares are down 2.7 percent in intraday trading, and the stock still represents what is known as a “busted” IPO. The recent price of $58 and change is a far cry from the $72 a share the company fetched earlier this year and an opening price that was north of $87. As in reported in MarketWatch, in recent days a slew of analysts have initiated coverage on the name with the impact that the majority of recommendations on Lyft are bullish ones.
That may not be enough to help matters, at least from our point of view.
In terms of keeping score, at the end of last month, six analysts were publishing on the name, and only one of them had what might be seen as a “buy” rating. Roughly one month later, there are almost two dozen analysts covering Lyft, and 13 rate it a buy, with another eight at hold or neutral ratings and one with a sell. In one note spotlighted in the report, Cowen and Co. Analyst John Blackledge initiated his coverage on Lyft with an “outperform” and $77 target, with mention of the Lyft “singular focus” on transportation that contrasts with Uber’s multi-faceted approach to verticals that also include food delivery. Lyft, said that analyst, will be able to offer better experiences for drivers, among other competitive advantages.
Separately, Jefferies Analyst Brent Thill, with an $86 price target, wrote, “We expect [the] stock to recover as Lyft executes and misconceptions clear. Although bears argue Lyft will never make money, our analysis shows improving margins and per ride metrics.” Revenues have outpaced bookings as measured in 2018.
But then again: The bullish sentiment seems not be a floatation device as the stock sank right in the wake of the news that new notes have been praising the growth and black ink that will be on the come — and of course the company still loses money. Wall Street is a voting machine sometimes, as the bullish notes show.
But at times, too, it is a weighing machine. The fact that investors — the ones that actually deploy money in order to own shares, and thus, a piece of the company — are not heeding the calls to line up and put money down means a lot.
It means investors are weighing what they get in return for ownership. Consider the fact that Levi Strauss, in its first earnings report since its IPO earlier this year, showed not just revenue growth but earnings on positive upswings too — even while it spends money to grow. That, likely more than bullish calls on the Street, has helped underpin its own shares. The company went public at $17; shares trade hands for about $22.30. Old school firms with profits seem to beat tech-sexy firms with the promise of profits — at least in this market, and at least for now.