Lyft Hasn’t Even Gone Public Yet and Has a “Buy” Recommendation

Lyft is expected to have its IPO later this month but has already received a “buy” recommendation.
The ride hailing service company will be listing on the NASDAQ at the end of March.

D.A. Davidson has initiated coverage on the company with a $75 price target. The IPO is expected to price in the range of $62 to $68 a share.

According to Tom White, senior research analyst at D.A. Davidson, Lyft’s ability to chip away at Uber’s dominance in recent years while “deftly maximizing the benefits by aggressively differentiating its brand/mission around socially-conscious values.”

“On-demand services have already disrupted traditional ownership models in sectors like entertainment/computing,” White wrote in a note. “The continued population migration to cities and the rising costs of personal car ownership will further drive adoption of “Transportation as a Service” (TaaS) models over the coming years.”

According to a Reuters report that cited sources familiar with the situation, the IPO is already oversubscribed based on investors’ commitments and it could exceed a $23 billion valuation.

“We question Lyft’s competitiveness when it comes to scaling its own autonomous driving system (primarily due to relative lack of scale and a late start,) but believe LYFT’s “platform” play for other autonomous driving players can help afford LYFT some time to either perfect/scale its own technology or secure a long-term partner,” White also added.