- This article explores how the recovery of the West Coast economy might potentially boost growth and market value for ride-sharing giant, Lyft, as projected by Brian Pitz of BMO Capital Markets. It delves into the direct correlation between the firm's growth and the resurgence of the regional economy, discuss the challenges posed by Covid-19 and the company's coping strategies, present growth projections, and extrapolate the implications of these for the ride-sharing and broader transportation industry.
In the realm of investment prospects, commentators in the financial sector often employ Modern Portfolio Theory (MPT) to evaluate opportunities. Central to MPT is the acknowledgement that the most pressing risk facing investors is the threat of insufficient returns. A closer look at Lyft's projected trajectory suggests the possibility of significant returns, although inherent risks are also present.
Further context can be derived from considering historical precedents such as Amazon, renowned for its hardiness even during economic lows. Notably, Amazon saw substantial growth during the financial meltdown of 2007-2008, procuring the highly valuable asset, Zappos. Lyft's venture into diversifying their services with the addition of bikes and scooters in the midst of a global health crisis can be likened to Amazon's strategic move. Although the circumstances of the two instances are not exact replicas, the similarities in strategic approaches hint at a possible win for Lyft.
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