Morningstar, traditionally a more conservative sell-side firm, has the highest target yet for Lyft’s yet-to-trade stock but says the company’s economic moat may be smaller than investors may want.
“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,” analyst Ali Mogharabi said in a note to clients earlier this month.
Like others, Morningstar points to a well-rounded network of transportation options inside the Lyft app. The company’s acquisition of Motivate gave it the upper-hand on Uber, whose Jump Bikes are in a smaller footprint compared to Motivate, which operates in most major US cities.
“In contrast to Uber, Lyft is not focused on food transportation or logistics,” Mogharabi said. “We like Lyft’s relatively narrower focus on consumer transportation but still note that Uber has an edge on Lyft in terms of an earlier start, higher market share, and a stronger network effect around its service. ”
This list will be updated as more analysts launch coverage of Lyft…
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