After tumbling in its first four weeks of trading, Lyft (LYFT 0.03%) finally caught a break. Shares of the the country's second most popular ridesharing service soared 9.2% last week.
But that doesn't mean the bad times are now fading the rearview mirror. A pair of bullish analyst notes helped move the battered shares higher, but the bears didn't go quietly. Between Uber's upcoming IPO and Lyft's upcoming first report as a public company on Tuesday, there are still a lot of things that can weigh on the stock's buoyancy.
Image source: Lyft.
Bring in the bulls
Ivan Feinseth at Tigress Financial initiated coverage of Lyft on Tuesday with a "buy" rating. He thinks we're still early in the transportation-as-a-service revolution and sees rising consumer demand helping Lyft's future sales. He also points out that there's a big opportunity to tap into healthcare transportation services.
A day later, we saw John Blackledge at Cowen offer up a bullish prognosis for Lyft's upcoming earnings release. He sees revenue soaring 88% to $745 million in Tuesday's quarterly report. He thinks Lyft's adjusted loss will be better than what his peers are modeling. It's not a surprise, then, to find Blackledge sticking to his earlier outperform rating and price target of $77.
Wall Street dismissed the outpouring of support when most of Lyft's underwriters chimed in with upbeat notes a week earlier. They were biased, the thinking went, and investors figured the underwriter firms were just trying to get the broken stock to turn positive. Now the market's taking last week's bullish moves more seriously.
It also helps that Lyft is just about to report fresh financials. It's not a coincidence that analysts are timing their bullish notes just ahead of the report, Lyft's first as a public company. You don't so that without thinking the report going to be a blowout.
It wasn't a perfect week for the bulls, though. Uber's IPO inched closer to reality, an event that may deal Lyft a blow as investors focus on the larger ridesharing service. Lyft also lost a lawsuit challenging New York City's minimum-wage rule for drivers.
On the analyst front, James Cordwell at Atlantic Equities kicked off his coverage of the stock with an "underweight" rating and a $50 price target. He prefers Uber, but even in that case he's tapping the niche leader with merely a "neutral" rating.
All eyes now turn to Tuesday, when Lyft reports its first-quarter results shortly after the market closes. If the first five full weeks of Lyft's trading have been volatile, the sixth week is going to be even more wild. Buckle up.
