Lyft company
LYFT INC CL A
-2.74%
closure:0
opening:10
High:10.05
low:9.41
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announced last night that co-founders Logan Green, the current CEO, and John Zimmer, the current president, are transitioning to non-executive roles on the board. Green will leave his position as early as April 17, while Zimmer will leave on June 30.
David Richer, who has been on Lyft’s board since July 2021, was announced as the incoming CEO. Prior to Lyft, Richer was a general manager at Microsoft and served as Amazon.com’s first head of product and head of US retail.
“Building Lyft alongside John Zimmer over the past 16 years has been the adventure of a lifetime,” said Green. “After a long journey, our industry is defined by the ride-sharing model that Lyft pioneered. All founders eventually find the right moment to step back and the right leaders to change gears and take their company forward.”
Lyft shares rose 3.7% in early trading on Wall Street to $9.95 a share, after falling 2.7% yesterday, while the S&P 500 rose 0.2% and the Nasdaq fell 0.5%.
Lyft’s stock has been in recent turmoil as it fell 36% on February 10 after the company provided disappointing forecasts when it released its fourth quarter 2022 reports. The company reported revenue of $1.2 billion in the fourth quarter with a revenue forecast of $975 million for the first quarter of 2023 – low Analysts expect revenues of $1.1 billion. “It was a twilight zone situation for Lyft while losing market share to big brother Uber
UBER TECHNOLOGIES
-0.42%
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High:31.03
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“, said Wedbush analyst Dan Ives. “Uber has gained significant share while the market has lost all faith in Lyft’s management.”
Lack of confidence is reflected in stocks. Lyft’s stock is down about 89% from its all-time high of $88.6 reached after its IPO in March 2019. On the other hand, its Uber shares have performed better, falling about 52% from a high of $64.05 in February 2021. Also the recent sales performance of Uber were better than Lyft. Uber sales are expected to reach $8.6 billion in the first quarter of 2023, a figure similar to the fourth quarter of 2022.
Uber shares receive a “buy” rating with a target price of $40 (potential upside of 30.6%) compared to Lyft’s shares which receive a “hold” rating and a target price of $13 (potential upside of 35%). 89% of analysts covering Uber stock rated it a “buy” when the average buy ratio for stocks in the S&P 500 is about 58%. On the other hand, only about 21% of the analysts covering Lyft shares rated it a “buy”.
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