If You’d Invested $1,000 in Lyft Stock 3 Years Ago, Here’s How Much You’d Have Today

Lyft (LYFT 4.50%) has been a publicly traded stock since March 2019. The company sold 32.5 million shares at $72, raising about $2.3 billion from its initial public offering (IPO).

The ride-hailing business initially planned to sell about 30.8 million shares at a price between $62 and $68. But the share price fell quickly after they started trading. If you decided to invest in Lyft three years ago, how much money would you have now?

Shareholders lost money

Three years ago, you could have bought the company’s stock for about $48, or 33% less than the IPO price. However, this did not prove to be a bargain price. The stock is currently trading at around $12, which translates to a staggering 75% loss. If you had invested $1,000 at the IPO, you would have less than $250 now.

The S&P 500 it has returned almost 31% during this time. That same $1,000 would have grown to over $1,300 if you had passively invested in the index.

Lyft’s revenue growth remains strong, rising 40.6% in the second quarter to $1.4 billion. Certain key metrics continue to grow, including a 17% increase in gross bookings to over $4 billion. And it did reach US GAAP profitability, albeit only $5 million.

Amid this positive news, management issued warm guidance for the third quarter. Bookings are expected to come in at $4 billion to $4.1 billion, broadly flat from the second quarter, which could reflect its lower prices as Lyft faces intense competition from Uber technologies in the ridesharing industry.

Lyft is engaged in a market share battle with Uber, but the latter has a larger global presence and broader services. As a result, I would wait before buying Lyft stock until the company demonstrates that it can achieve sustained profitability growth. After all, stock pickers who thought they were getting a bargain three years ago were sorely mistaken.