BMO Capital Markets analyst Brian Pitz initiated coverage on the shares of LYFT Inc (NASDAQ: LYFT) with a Market Perform rating and a price target of $15.
Insurance cost inflation uncertainty could weigh on near- and longer-term margin unlock as well as overall sentiment, says the analyst.
Lyft lost market share to Uber Technologies Inc (NYSE: UBER) in 2022, given slower West Coast recovery and inflationary pressures on insurance costs (COGS) weighed on both revenue and adjusted EBITDA, notes the analyst.
So, users who have churned to Uber could be less willing to choose Lyft given lack of cross-sell capabilities, says the analyst.
Under new management, Lyft decided to lower prices to align more with industry trends, which has resulted in accelerated volume growth.
The analyst notes that Lyft over-indexes to West Coast markets, which continue to recover to pre-pandemic levels, offering upside to estimates as ...