UPDATE: Evercore ISI Downgrades Lyft (LYFT) to In Line

Evercore ISI analyst Mark Mahaney downgraded Lyft (NASDAQ: LYFT) from Outperform to In Line with a price target of $18.00 (from $41.00).

The analyst comments "We are downgrading shares of LYFT from Outperform to In Line in the wake of Q3 EPS results. With shares down 70% YTD, we have been on the wrong side of this one. Our Long Thesis was based on our belief that LYFT’s fundamentals would benefit as a late-cycle rideshare recovery name. We believed that the company’s substantial exposure to West Coast markets and to Shared Rides would power strong Rider and Revenue recovery in H2:22. This may still happen and there may simply be a delay here, but the notably weak growth in Q3 Active Riders (452K vs. 2.1MM in Q2 and 1.8MM in Q3:21) is very concerning to us. As is the acknowledged market share loss to Uber. And the company’s Q4 revenue outlook appears soft to us – we’re modeling 10% Q/Q revenue growth vs. 12% in Q4:21, even though market conditions should be more favorable than a year ago. And then there’s the real potential that ongoing consumer softness – which hasn’t impacted ridesharing yet – WILL in ’23. Valuation is very reasonable here (1X EV/Sales and 9X EV/EBITDA), and we continue to believe strongly in the secular and profit growth potential of Ridesharing. But on this thesis, we’d much rather own UBER, given its superior scale and business model & geo diversification. Hence the downgrade."

For an analyst ratings summary and ratings history on Lyft click here. For more ratings news on Lyft click here.

Shares of Lyft closed at $14.14 yesterday.

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