Lyft stock slips as Goldman cuts to Sell
Lyft Inc (NASDAQ:LYFT) shares dipped 1.4% in early Thursday trade after Goldman Sachs analysts lowered their rating to Sell.
In the Mobility/Delivery Internet sub-sector investors are closely monitoring signs of consumer demand volatility despite industry data supporting solid growth and stable competition.
Following a year of cost optimization and consistent operating income beats, a more balanced approach is recognized. Competitive positioning and topline trends for Uber (NYSE:UBER) and Lyft in US Mobility are seen as stable, according to analysts.
“We continue to see Mobility and Delivery as some of the fastest growing verticals across our internet coverage today, with double-digit market growth across ridesharing, food delivery, and new verticals (incl. grocery, convenience, alcohol, on-demand retail, etc.),” the analysts said.
Moreover, they believe “that investor debates will remain focused on how companies execute against these opportunities as measured by compounded bookings growth and how scale will translate into incremental margins and rising profitability through 2024 & beyond.”
Goldman’s analysis shows that the advertising opportunity remains more significant within Delivery, while the Mobility sector should only feel “a small tailwind.”
The LYFT stock downgrade is a result of “a more balanced risk-reward skew in the stock following a nearly 35% increase in the company’s share price since its last Q3’23 earnings results in early November.”
“We remain constructive on LYFT’s operating trajectory from here and believe that revenue growth can reaccelerate (from GSe +7% YoY in 2023 to +15% in 2024) as the company starts to lap the headwinds from lower consumer prices introduced 12 months ago.”
“That said, we see
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