We have initiated coverage of Lyft with a narrow moat rating and a fair value estimate of $72 per share. Lyft became a public company, selling 30.8 million shares at an IPO price of $72 per share on March 29, 2019. The IPO price is in line with our fair value estimate and we would recommend a wider margin of safety before investing in this very high uncertainty name.
Founded in 2012, Lyft has emerged as the number two ride-sharing player in the U.S. market. In our view, Lyft warrants a narrow economic moat and a stable moat trend rating, thanks to the network effect around its ride-sharing platform and intangible assets associated with rider, rides, and mapping data, which we think can drive Lyft to profitability and excess returns on invested capital in the future.
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Ali Mogharabi does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.