Lyft needs a big lift, especially as its rival Uber is set to file its IPO as soon as Thursday and begin its roadshow at the end of the month ahead of its highly anticipated debut expected in May.
Continue Reading Below
Since debuting less than two weeks ago, Lyft’s stock has fallen to $61 a share from its debut high of $78, losing more than 22 percent so far in April.
What’s more, HSBC warned on Thursday that the ride-sharing company could be facing an even bumper ride ahead as competition will inevitably intensify as Uber seeks to raise $10 billion through its initial public offering, according to the Financial Times.
HSBC analyst Masha Kahn initiated Lyft’s stock at neutral with a $60 target, writing that she anticipates a “bumpy ride” ahead for the company since it’s the clear number two player in its market.
"Given that smaller, number two players will always scale at a lower margin than dominant players, we think Lyft deserves a discount to other ride-hailing players that dominate their markets," she wrote.
Kahn added that self-driving vehicles could potentially be a “game changer” as well for the industry. However, she doesn’t expect that to happen before 2025.