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One Wall Street firm is recommending its clients buy Lyft weeks before that’s even possible.
released its long-awaited IPO prospectus in early March, showing that much like Uber, it’s losing money. The San Francisco-based company lost $911 million on $2.1 billion in revenue last year, according to the filing. Lyft expects sales to grow faster than its losses.
Still, there’s plenty of enthusiasm for the IPO across Wall Street. According to a Reuters report Tuesday, the public offering is already oversubscribed based on investors’ commitments. This would make it likely the ride-hailing startup could exceed a $23 billion valuation, according to the report, which cited people familiar with the matter. The company’s roadshow is already underway.
Meanwhile the biggest player in the market, Uber, is reportedly looking to kick off its own IPO offering next month in a deal valuing the San Francisco-based company at $120 billion. Other Bay-area tech firms Airbnb and Slack have have also signaled plans to go list in the U.S. this year.
There are risks though. White cited uncertainty around its long-term margins, risks associated with its positioning in autonomous driving technology, and the “fluid” regulatory legal landscape for the ride-sharing industry.
“We question Lyft’s competitiveness when it comes to scaling its own autonomous driving system (primarily due to relative lack of scale and a late start,) but believe LYFT’s “platform” play for other autonomous driving players can help afford LYFT some time to either perfect/scale its own technology or secure a long-term partner,” White said.