Lyft Gets First Buy Rating Ahead of IPO on Market Share Gains

(Bloomberg) -- Lyft Inc. received an encouraging sign from Wall Street on Wednesday, winning its first buy rating more than a week before shares start trading.

The rival to Uber Technologies Inc. has made impressive market share gains within the U.S. as demand for ride-sharing continues to grow, D.A. Davidson analyst Tom White wrote in a note. Lyft is the No. 2 player in the ride-sharing market and has grown its share to 39 percent from 22 percent in the past two years, he said.

"The continued population migration to cities and the rising costs of personal car ownership will further drive adoption of ‘Transportation as a Service’ models over the coming years," White wrote.

The 6.4x 2019 enterprise value to sales multiple represented at the offering’s midpoint looks reasonable given Lyft’s growth profile, he added.

The bank’s $75 price target is 15 percent above the midpoint of Lyft’s $62 to $68 IPO price range. IPOs typically price at a 10 percent to 15 percent discount to the company’s valuation. Shares are expected to debut on March 29.

To contact the reporter on this story: Drew Singer in New York at dsinger28@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Will Daley

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