Lyft slips as Cowen downgrades, citing a number of points, together with weaker revenues

Lyft (NASDAQ:LYFT) shares slipped on Tuesday as funding agency Cowen downgraded the ride-sharing firm, citing quite a few points, together with worries over weaker revenues sooner or later and uncertainty about its 2024 EBITDA steering.

Analyst John Blackledge lowered his ranking on Lyft (LYFT) to market carry out from outperform and slashed the worth goal to $14 from $36, noting that the problems usually are not prone to go away within the near-term.

Along with weaker income and uncertainty about 2024, which Lyft stated beforehand it will hit $1B in EBITDA, Blackledge additionally famous issues over greater insurance coverage prices, “which may persist as a consequence of inflationary pressures.” The analyst additionally cited regulatory overhang as a difficulty, introduced upon by the Division of Labor proposal to categorise Lyft drivers as workers.

“We acknowledge {that a} recession ought to drive higher driver provide and decrease driver [acquisition] prices (from greater unemployment), however we might be involved about influence from a slowing high line,” Blackledge wrote in a be aware to shoppers.

Lyft (LYFT) shares fell 1.2% to $10.92 in premarket buying and selling, whereas competitor Uber (UBER) rose fractionally.

On account of the aforementioned issues, Blackledge lowered his income estimate for fiscal 2023 by 4% and lower his EBITDA forecast by 14%.

“Long term, we lowered our Energetic Rider forecast 6-18% yearly from ’24-’31, whereas we lowered our income per lively rider [estimates] 2-8% yearly over the interval,” the analyst defined.

“Consequently, we lowered our income forecast 15% on common yearly and lowered our EBITDA forecast 37% on common yearly from ’24-’31.”

Final week, Lyft (LYFT) introduced that it joined with driverless know-how firm Motional to let riders in Los Angeles, California guide robotaxis on Lyft’s app.

Analysts are everywhere in the map on Lyft (LYFT). It has a HOLD ranking from In search of Alpha authors, whereas Wall Road analysts charge it a BUY. In search of Alpha’s quant system, which persistently beats the market, charges LYFT a HOLD.