Several Reasons Lyft Is The Rideshare Stock You Want

LYFT boasts multiple levels of support as well as contrarian potential

Digital Content Manager
Mar 4, 2024 at 2:21 PM
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Lyft Inc (NASDAQ:LYFT) was last seen up 5% to trade at $17.17, bouncing off a floor at the $15 level, with added support from the 20-day moving average. Today's jump comes after RBC upgraded shares to "outperform" from "sector perform," and lifted its price objective to $23 from $17. LYFT is pacing for its third-straight gain, poised to make another run at its Feb. 15 52-week high of $19.42, and has added more than 69% in the last nine months.

LYFT 20 Day

This bull note could inspire other covering brokerages to change their bearish stances. Coming into today, 28 firms in question carried a "hold" or worse rating, while only four said "buy" or better. The 12-month consensus target price of $15.49 is also a 9.7% discount to the stock's current trading levels. 

Short sellers are already hitting the exits, but there's still ample pessimism left to unwind. Short interest fell 5.6% in the last two reporting periods, yet the 46.14 million shares sold short make up 13% of Lyft stock's available float.

Shifting sentiment in the options pits could further assist LYFT's rally. This is per the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.27, which stands higher than all but 3% of readings from the past year. In other words, short-term options traders have rarely been more put-biased. 

Those looking for affordable premiums should consider weighing on the security's next moves. LYFT's Schaeffer's Volatility Index (SVI) of 60% ranks higher than only 9% of annual readings, implying options traders are pricing in much lower-than-usual volatility expectations.

 

 

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