Will Uber and Lyft Stocks Shift Out of Reverse?

With shares of Lyft (NASDAQ: LYFT) and Uber (NYSE: UBER) hitting new lows earlier this month, at least one Wall Street pro sees this as a great opportunity to hail a ride on the out-of-favor ridesharing stocks. Masha Kahn at HSBC is upgrading her ratings on both stocks -- from hold to buy -- even if it means lowering her earlier price targets set when Lyft and Uber were trading much higher. 

She feels that the regulatory risks stemming from California's push to get Uber and Lyft to reclassify their drivers as actual employees with related benefits are already priced into the shares, given the roughly 23% slide for both stocks in the past three months. Despite the massive losses being posted by the two players, Kahn also sees a clear path to profitability if they can leverage their fixed cost base while scaling back on sales and promotional marketing efforts.

In short, both stocks are already discounting the bearish arguments, and there aren't enough people talking up the bullish case for an industry that's clearly on the rise as an evolutionary -- if not revolutionary -- workhorse of the gig economy.

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Source Fool.com