Lyft Stock (NASDAQ:LYFT)
Argus and BTIG, two research companies, downgraded the ride-sharing company Lyft (NASDAQ:LYFT) on Tuesday because of concerns over the company’s financial health, which caused the stock price of Lyft (NASDAQ:LYFT) to continue falling.
The operational deficit in the fourth quarter was attributable to lackluster pricing, increased payroll taxes, and more stock-based compensation, according to Argus analyst Bill Selesky, who downgraded his recommendation on Lyft stock from buy to hold after noticing this information.
Selesky said in a letter to clients that while Lyft has worked to minimize expenses, the business still believes that more cost reductions are necessary to bring the company’s cost structure into line with its competitors.
Selesky revised his profits forecast for 2023 down to 33 cents per share, a significant decrease from his previous forecast of 80 cents per share.
BTIG analyst Jake Fuller lowered his recommendation on Lyft to buy from neutral, citing the poor financial performance of Lyft as well as the strong position that Uber (NYSE:UBER) is in, given its better margins. Fuller also noted the weak position that Lyft is in, given the competition from Uber (NYSE:UBER).
Without more and considerable cost reduction, according to Fuller said, “it is difficult to see how LYFT can remain competitive on pricing AND ramp margin towards levels envisioned in past 2024 aspirations.”
LYFT was downgraded by several other Wall Street analysts last week after the company announced poor expectations for the first quarter, which some analysts called a “debacle.”
In premarket trade, Lyft stock fell 1.5% to $10.30, while those of rival Uber Technologies declined 0.8% to $33.16.
Gordon Haskett, an investment group, recently downgraded LYFT, noting the stock’s dramatic increase since the beginning of the year and its preference for Uber.
Featured Image: Unsplash @ Thought Catalog
Author Shariq Khan 
