Ride-hailing service provider Lyft’s shares rose as high as 23% in its market debut on Friday, as investors showcased strong demand for the company’s shares.
This highly successful debut of Lyft not only makes it the year’s biggest IPO thus far, but also sets the stage for other Silicon Valley unicorns like Pinterest Inc, Postmates Inc and Slack Technologies Inc. seeking to debut in stock market this year.
Lyft’s shares reflect investors’ zeal to explore technology. On Thursday, Lyft priced 32.5 million shares, slightly more than it was offering originally, at $72, on top of its already elevated $70-$72 per share target range, raising $2.34 billion in its initial public offering. Its stock opened at $87.24 but later cut back on gains close up 8.7% at $78.29, giving Lyft a market capitalization of around $22.2 billion.
Even though Lyft’s subscriptions have grown with more than 500 orders from institutional investors, certain concerns still need to be addressed.
Despite revenue doubling in 2018 to $2.16 billion, Lyft’s losses rose from $688 million in 2017 to $911 million last year. Profit is a metric that motivates investors to take risks in business. The same applies to Uber, which is also still a loss-making company.
It is believed that these companies’ losses come from subsidizing rides, a tactic to attract riders with discounts. Despite Lyft’s steep loses, criticism of its dual-class share structure, and some concerns over its strategy for autonomous driving and new laws aimed at increasing driver pay.
The company’s Chairman confirmed that Lyft will continue to focus on its North American growth over international expansion after the completion of its IPO.
LYFT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options. In of 38 cases where LYFT's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on May 02, 2024. You may want to consider a long position or call options on LYFT as a result. In of 87 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for LYFT just turned positive on May 06, 2024. Looking at past instances where LYFT's MACD turned positive, the stock continued to rise in of 39 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where LYFT advanced for three days, in of 285 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
LYFT moved below its 50-day moving average on April 18, 2024 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for LYFT crossed bearishly below the 50-day moving average on April 24, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 22 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where LYFT declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for LYFT entered a downward trend on May 06, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. LYFT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (14.205) is normal, around the industry mean (30.031). P/E Ratio (0.000) is within average values for comparable stocks, (155.935). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.725). Dividend Yield (0.000) settles around the average of (0.081) among similar stocks. P/S Ratio (1.684) is also within normal values, averaging (55.589).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. LYFT’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 90, placing this stock worse than average.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a provider of online social rideshare community platform
Industry PackagedSoftware