Lyft stock was double-downgraded to an underperform rating from a previous buy call by analysts at Bank of America, who expect autonomous cars to pose a challenge to the ride-hailing app company. Lyft stock fell on a dour overall day for stocks.
BofA Securities analyst Michael McGovern said in a client note Thursday that Lyft has "substantial AV risk," referring to autonomous vehicles. The growth of autonomous ride-hailing from the Alphabet-backed Waymo, plus Tesla's pledge to enter the market, have weighed on shares of both Lyft and its larger rival Uber since last spring.
Waymo operates in San Francisco, Los Angeles, Phoenix and Austin, with plans to expand soon to Atlanta and Miami.
"We think Waymo could launch rides to SFO (San Francisco International) airport this year or next, a significant negative catalyst," McGovern wrote. "Waymo is also testing and launching other cities, but San Francisco and Los Angeles are particularly important for Lyft given its higher West Coast mix."
McGovern estimates that Lyft generates more than 20% of bookings in California, whereas the Golden State is likely less than 10% of Uber's bookings. Uber operates globally while Lyft is focused in North America.
Meanwhile, Uber is partnering with Waymo in Phoenix, Austin and Atlanta. While Lyft is working with AV developer Mobileye, BofA characterized Lyft's AV partnerships as "still-nascent."
Lyft Stock Drops 11%
Lyft stock lost more than 11% to close at at 11.48 on the stock market today. Tech stocks more broadly tumbled Thursday in response to President Donald Trump's tariff plan. The stock was trading roughly flat heading into Thursday's trading. But Lyft is down 36% from 12 months ago.
Lyft has a market cap of just under $5 billion compared to nearly $150 billion for Uber, which also operates a food-delivery business. Uber stock is ahead 17% so far this year despite a 4% loss Thursday. But Uber is down about 7% from 12 months ago.
