Reuters
FILE PHOTO: A car with a Lyft logo in its window drives down a street as the company prepares for its upcoming IPO in New York
- Lyft shares swung between gains and losses on Tuesday, marking a volatile third day of trade.
- The newly minted ride-sharing stock has lost about 20% of its value since going public last week.
- Investors were enthusiastic heading into Lyft's historic initial public offering, but analysts are concerned about the company's uncertain path to achieving a profit.
- There's also Uber.
- Watch Lyft trade live.
Lyft's early days of trading as the first public ride-sharing company have been pretty messy.
Shares fell as much as 3% Tuesday after swinging between gains and losses for most of the morning. On Monday - its first full day of trading on the Nasdaq - Lyft tanked nearly 12% after an investment firm came out with a lukewarm "neutral" rating.
And in its trading debut on Friday, Lyft surged out of the gate before closing out the session on its lows. Shares turned negative in after-hours trading.
Analysts are generally concerned about Lyft's uncertain path to profitability, as well as the competition Uber poses once it hits the public market. Other ride-sharing players throw more uncertainty into the mix.
Michael Ward, an analyst at Seaport Global, became the latest analyst to voice a cautious view on the name on Tuesday. He initiated his coverage with a "sell" rating.
"While we believe the ridesharing market will continue to grow and expect LYFT to be a prime competitor, in our view, current valuations reflect an overly optimistic view of consumer behavior in the US," said Ward.
Lyft shares would have to drop around 40% from current levels to reach Ward's price target of $42.
Now read more Lyft coverage from Markets Insider and Business Insider:
- Lyft and Levi's just went public with 2 very different IPOs that say the same thing about what investors want
- L yft is deeply unprofitable - but that isn't stopping eager Wall Street investors
- Here's who's getting rich from Lyft's enormous IPO
- Here's what the first Wall Street analysts to cover Lyft stock are saying about the stock
