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Lyft's Debut Looks Like Snap All Over Again, IPO Analyst Warns

Drew Singer

(Bloomberg) -- As investors toil over how to value Lyft Inc., one analyst who specializes in tech listings advises looking at the ill-fated IPO by Snap Inc.

The pair looks so similar because both firms face competition from significantly larger rivals and they both could have disclosed more data to potential buyers, said Rett Wallace, chief executive officer of Triton Research Inc. Wallace renewed his attack on Lyft Thursday after saying earlier that there was “almost nothing” in its filing to assess the business.

“Lyft is even less differentiated relative to Uber than Snap was to Facebook,” Wallace said in a phone interview. “And Lyft is even playing it the same way as Snap did -- let’s just look at the top line and ignore the profitability story and not give investors the metrics they need to forecast the future.”

Snap traded as low as 72 percent below its initial public offering price within two years of its 2017 debut. The social media firm’s IPO priced above its offering range amid a flood of media attention and buzz on Wall Street.

Triton scores Lyft a 5.5, below its 5.9 rating for Snap at the time of its listing and below its 6.3 average for all technology IPOs. Offerings since January 2018 with similar Triton scores have underperformed through March 1, according to the firm’s data.

“If they had given us more transparency, their model confidence would have gone up,” Wallace said of Lyft. “However, telling me about your mechanics and your mechanics being good are separate but related points.”

To be sure, not everyone is so cautious. Susquehanna analyst Shyam Patil wrote in a note Thursday that the ride-share company’s executives likely “set a low bar” for financial estimates, allowing for a near-term upward bias to its numbers. Lyft also got its first buy rating on Wednesday from D.A. Davidson analyst Tom White, who cited impressive market share gains.

The shares are expected to debut 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, Catherine Larkin

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