It’s been clear for some time now that, when it comes to ride-sharing, Lyft (NASDAQ:LYFT) is the also-ran against Uber (NASDAQ:UBER). But with Lyft’s most recent earnings report out, it’s clear that getting Lyft out of second place is going to be a huge task. According to a Wedbush report, it’s an “uphill battle” on par with Everest itself. As a result, shares fell 19.27% in Friday’s trading.
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The word came from Wedbush’s own Daniel Ives, who offered the unpleasant comparison to the world’s tallest mountain. Ives noted that Lyft’s previous management had “…essentially lost all Street credibility” thanks to weak guidance offered up in the fourth quarter earnings call. Big changes were supposed to come with the new CEO—and you can ask the over one-in-four employees laid off if they think things have changed—but Wall Street seems to believe that things are pretty much the same as they were.
Ives noted that it was “still way too soon” for any serious changes to emerge but that the next quarter would help provide insight into the likely overall direction. This was a sentiment echoed by D.A. Davidson analyst Tom White, who said that the new CEO would have to prove some capability before he could modify his rating at all. Further, transportation industry consultant Hubert Horan noted that even if Lyft loses ground, it may not mean gains for Uber. There would be no “material operating scale economies,” Horan stated.
Analysts are not at all sold on the new CEO’s ability to turn things around at Lyft. With six Buy ratings, one Sell, and a whopping 25 Holds, analyst consensus makes Lyft stock a clear Hold. However, for those who want to take the chance, Lyft stock offers investors 59.77% upside potential thanks to its average price target of $13.78.
