Lyft (NASDAQ:LYFT) investors can't seem to catch a break, even under ideal conditions. The stock declined 1.9% last week, taking another hit despite having several of last month's IPO underwriters chime in with bullish analyst initiations.
The country's second largest ridesharing service has now been public for four full weeks, and the stock has moved lower in all four of them. The shares opened sharply higher on their first day of trading last month, but since then investors have experienced drops of 4.9%, 19.5%, and 2.6% before last week's dip. The 1.9% descent over the past five trading days is its smallest decline, but you won't see too many Lyft stakeholders high-fiving one another on the relative victory. The stock keeps going in reverse, and that's a rough way to drive.
Looking for a bottom
If there was any week for Lyft to bounce back, it should've been this one. Underwriters wait at least 25 days after an IPO to initiate coverage, and with Lyft stock trading well below its $72 debut price, it would be a cattle call for most of the offering's 20 underwriters to step up with bullish notes. Even if it's expected, it should've filled the air with optimistic sentiment, but it just didn't work.
- Jefferies analyst Brent Thill argued that there's a lot of runway left in this niche that accounts for only 1% of the miles driven at the moment. He thinks the broken IPO is a compelling value here. No such luck.
- Ronald Josey at JMP Securities sees near-term upside from the push into bike and scooter rentals as well as the long-term promise of self-driving vehicles. No dice.
- JPMorgan's Doug Anmuth is bracing for encouraging secular growth in the "transportation-as-a-service" field, slapping a projected annual revenue growth rate of 32% on Lyft through 2021. That wasn't enough.
- Michael Olson at Piper Jaffray sees ride-hailing as a $500 billion industry come 2040, and Lyft is well positioned as the feisty silver medalist that's gaining market share in this duopoly. He concedes that it will require patience and a long-term view to see Lyft through, but, alas, investors still bailed.
These were just some of many bullish initiations that offered up price targets north of its original IPO price of $72 last week. The predictable enthusiasm didn't sway the market, as the bearish headlines detailing the steep losses overtook the upbeat analyst notes.
Lyft will eventually have a week in which its stock moves higher. Every dog has its day. Lyft just needs a catalyst, and it needs one soon.