Bear Note for Lyft Stock Ahead of First Earnings, Uber IPO

Lyft's first earnings report as a public company is next Tuesday

Managing Editor
May 3, 2019 at 11:51 AM
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Next week is a monumental one for LYFT Inc (NASDAQ:LYFT). First, the ride-sharing service has its first earnings report as a public company, scheduled for after the close on Tuesday, May 7. Then, fierce rival in the ride-sharing sector Uber (UBER) will go public a week from today. 

At last check, Lyft stock is down 1.2% to trade at $60.70, after Atlantic Equities initiated coverage with an "underweight" rating and $50 price target -- a discount of roughly 19% to yesterday's close. The analyst in coverage voiced a preference for Uber over Lyft -- doling out a "neutral" rating for Lyft's chief competitor -- predicting that competition between the two will remain fierce. 

This runs converse to the analyst sentiment on Lyft seen so far. Of the 18 brokerages in coverage, 12 rate it a "buy" or better, with only one "sell" on the books. Plus, its consensus 12-month price target of $76.28 is a 26% premium to its current perch. 

Options activity has also been bullish on LYFT so far. Traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have initiated 1.54 long calls for each put over the last 10 sessions. The June 100 call is home to peak open interest of 11,683, with Trade-Alert pointing to mostly buy-to-open activity here.

LYFT is trading well-below its $72 per-share initial public offering (IPO) price. Since an bear gap on its second day of trading, April 1, the shares have consolidated below the $62 level. But despite today's pullback, the security is heading toward its first ever weekly win. As far as next week, the options market is pricing in a 13.2% swing the day after Lyft's first earnings report. To put that in perspective, LYFT's largest single-session move so far in its short history was the aforementioned 11.9% drop on April 1. 

Daily Stock Chart LYFT

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