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Investors Should Wait to Take a Lyft


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.

Ali Mogharabi does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.