Lyft (NASDAQ:LYFT) reported its shares fell in early Monday trading after Lyft was downgraded to hold from buy at research firm Gordon Haskett. The firm said in a note that Lyft’s active rider metric for the fourth quarter could fall short of expectations.
Analyst Robert Mollins lowered his rating on the ride-sharing company to hold from buy, while cutting the per-share price target to $19 from $24, citing worries about active riders falling below estimates, which could lower the firm's revenue growth.
Mollins lowered his 2023 and 2024 estimates on Lyft, cutting his revenue forecast to $4.7 Billion and $5.2 Billion, down from $4.9 Billion and $5.6 Billion, and EBITDA estimates fell to $535 million and $727 million from $650 million and $906 million.
In addition to worries over active rider estimates, Mollins noted that while Lyft has made "meaningful progress" on reducing quoted wait times, the company may see negative impact from using higher prices to attract drivers, as it could cede market share to Uber (NYSE:UBER)
Mollins also said that if the regulatory environment were to shift against gig companies, Lyft would be more disadvantaged than Uber, "given its predominately U.S.-based business model."
Last month, Uber and Lyft scored a key regulatory win as a New York court blocked a potential rate hike from New York City's Taxi and Limousine Commission.
LYFT shares slipped 31 cents, or 1.8%, to $17.07.
