Lyft is one of my favorite tech stocks right now. It recently dipped to as low as $12.40 which is lower than it was in March of 2020 when the markets sold off due to the pandemic. Once government policy was established, Lyft bounced back in 2020 very quickly and it caught me off guard and I instantly regretted it. I haven’t made the same mistake twice.
I don’t expect Lyft to be under $20 for long. But for as long as it stays down there, I am a buyer. Lyft is $16.24 today which gives it a market cap of 5.98 billion dollars and a Relative Strength Index (RSI) of 49.72. With an RSI around 50, it doesn’t suggest this stock is oversold. However, with a market cap of under 6 billion dollars, it’s still very cheap.
Even if robotaxis never arrive and we require people driving us around in Lyft vehicles, it will still one day become a 100 billion dollar company based on today’s value of a dollar. So there is little downside in buying Lyft today. And with robotaxis, it will become a trillion dollar stock because robotaxis mean a lot more cars on the road, and companies like Lyft will be trusted to deliver the fleets of cars that people hire.
Those who don’t think Lyft is an attractive buy at $16 are those who think the pandemic is far from over. If Covid does cause more problems than we know today, it could be that Lyft remains under $20 for the foreseeable future. But even if a recession is announced, I don’t know how long it could stay under $10. Coming into 2023, a company like Lyft is simply too far advanced to have a market cap under $5 billion for long.
Lyft may top the list of all the beaten-down stocks this year that are obvious candidates to bounce back.
Image credit: Finviz