Lyft Stock (NASDAQ:LYFT)
The appointment of board member David Risher as Lyft’s (NASDAQ:LYFT) new CEO has been met with applause from investors and analysts, sending the stock price of Lyft stock up by more than 5% in premarket trade on Tuesday.
Yet, some experts questioned why the change had yet to be made sooner.
An analyst at Wedbush Securities, Dan Ives, called it the “correct strategic decision.” Still, he said it should have been implemented a year ago since the firm has been a “train disaster” over the last six months because of its disappointing 2023 outlook.
With a new CEO in place, Ives argued that Lyft had “all options on the table,” including a possible sale.
Ives also pointed out that Risher’s first objective as Lyft CEO is to slash expenses and return to profitability after losing market share to Uber Technologies (NYSE:UBER).
Ives rates Lyft stock as neutral and sets the price objective for one share at $13.
Lyft said late on Monday that co-founders Logan Green and John Zimmer had been removed from their CEO and president positions but would be joining the board of directors.
According to Michael McGovern, an analyst at Bank of America who has an underperform rating on Lyft stock and a $10 per share price objective, the recent management shakeup should be seen as an opportunity to approach the competition with a “new, customer-focused viewpoint” (UBER).
According to McGovern, Risher will bring a “customer-obsessed” approach to Lyft, which might lead to cheaper trip costs, improved driver incentives, and more attention to detail.
Although this news should improve “already low levels of sentiment,” as McGovern put it, the company’s fortunes will not change overnight. McGovern predicts that the first quarter of 2023 “will likely be more normalized than the 2022 travel season, which benefited from still pent-up demand,” which may lead to slower quarter-over-quarter bookings increase.
A California court ruled earlier this month that ride-sharing drivers and other drivers are independent contractors, not firm employees, which was good news for Lyft and Uber.
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Author Shariq Khan 
