FILE PHOTO: Signage for Life is displayed at NASDAQ MarketSite in Times Square in celebration of its initial public offering (IPO) on the NASDAQ Stock Market in New York, US, March 29, 201
SAN FRANCISCO (Reuters) – Stockholms Inc sank further below its IPO price on Tuesday after receiving its first negative review from an analyst who is skeptical that consumers will give up car ownership in favor of relying on ride-hailing services .
Shares of the money-losing San Francisco company fell as much as 4.2 percent to $ 66.10 on Tuesday, their second straight session of being released after a hotly anticipated $ 72 initial public offer on Friday. The stock was down 2.3 percent at $ 67.41 early on Tuesday afternoon on the Nasdaq.
The stock's weak performance could make investors more cautious about a string of expected public listings from Silicon Valley unicorns, including Uber Technologies Inc and Pinterest, which are also unprofitable.
Seaport Global initiated coverage of lift with a sell rating and a $ 42 price target, with analyst Michael calling the stock's current valuation a "leap of faith" that consumers will carry on cars in favor of using ride-hailing services .
"Despite the optics of vehicles being underutilized, we believe people will continue to own their own vehicles as primary transportation and instead rely on the ridesharing services as a convenient supplement," Ward wrote in a client note.
Another five analysts have initiated coverage of lift, with two of them recommending the stock and three assigning neutral ratings. Those five analysts on average expects revenue to jump 60 percent to $ 3.45 billion by 2019, while Ward estimated 2019 revenue would reach $ 3.40 billion.
Released reported a loss of $ 911 million in 2018, more than its $ 688 million loss in 2017, despite revenue doubling in 2018 to $ 2.16 billion. It has not said when it expects to become profitable. The stock, which surged as high as $ 88.60 in the first few minutes after its listing on Friday before slipping steadily lower, is now trading at about 5.7 times expected annual revenue. By comparison, Alphabet Inc's stock is currently at 4.8 times expected revenue, while Facebook Inc. is at 6.5 times expected revenue.
Reporting by Noel Randewich in San Francisco; Editing by Matthew Lewis