All Options Are On The Table After Lyft Names Its New CEO

Analysts at Goldman Sachs say that Lyft LYFT +0.73% has restructured its management, opening up opportunities for the company, including potential acquisitions.

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It has just been announced that Lyft (ticker: LYFT) will be expanding its board of directors, officially moving its current CEO Logan Green, and President John Zimmer into non-executive roles.

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For Green, the change will take effect on April 17, while for Zimmer, the change will take effect on June 30.

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Currently, Risher serves as a director of Lyft's board of directors, and the newly appointed CEO, David Risher, was announced on Monday.

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It is still possible to see a thank-you note from Amazon founder Jeff Bezos to Risher on the Amazon website, in which he served as head of U.S. retail and head of product at Microsoft MSFT –1.50% (MSFT).

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As Green explains in a news release, “Building Lyft with John has been an adventure of a lifetime. Hundreds of millions of rides later, Lyft has pioneered the ride-sharing model that defines the industry. The founders of each company eventually find a time when they need to step back and hire the right leaders to succeed.”

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During the premarket trading period, shares of Lyft rose by 4.8% to $10.06 per share.

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While the S&P 500SPX -0.38% gained 0.2% in regular trade Monday, this stock lost 2.7% as the Nasdaq Composite Index lost 0.5% and the S&P 500SPX -0.38% fell 0.2%.

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According to Wedbush analysts led by Dan Ives in a recent research note, "Mr. Risher has his work cut out for him as we believe that all options, including a possible sale, will now be on the table for Lyft under a new CEO,"

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Shares of Lyft, Lyft's peer, are down about 52% from their record high of $64.05, reached in February 2021, and up about 89% from their all-time high of $88.60.

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As a result of disappointing guidance provided by Lyft when it reported the fourth-quarter results, the stock of Lyft dropped 36% on Feb. 10. Lyft reported revenue of $1.2 billion for the December quarter. However, Lyft's first quarter revenue projection was $975 million, falling short of the Street's expectation of $1.1 billion.

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In the first quarter, Uber's sales are expected to be $8.6 billion, flat compared with Lyft's sales of $8.3 billion in the fourth quarter of 2022, according to a report from the World Economic Forum.

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Currently, Ives considers Uber shares to be a buy, with a price target of $40 a share. He considers Lyft shares to be a hold, with a price target of $13, and he rates both shares to be a buy.

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There is close alignment between Ives' ratings and those of the majority of Wall Street analysts covering the stock. Uber has 89% of analysts rating it as a Buy and the average Buy-rating ratio for stocks included in the S&P 500 is 58%. Approximately 21% of analysts covering Lyft have rated the stock as a Buy.