I see a lot of comments about how Lyft is over-valued. I am writing to genuinely understand if it's really over-valued. Looking at Okta's financial for 2018, their revenue is around $260M and their operating loss is around $117M. That's around -43% of the revenue. Okta's valuation is around $9B Lyft in 2018 made $2.2B in revenue and loss is around $911M. This is around -41.4%. Current valuation is around $24B. Given this, why everyone thinks Lyft is over-valued? Lyft's has a much better growth story than okta. Inspite of it why everyone is skeptical of lyft. PS: I understand okta and Lyft are different companies. But, I drew this parallel only to understand how financials work.
this is not how financial works
Can you please explain why this is incorrect?
you cherry picked one example that kinda sorta supports your argument, not great. no one really knows what really sets these prices. expect lots of volatility in the coming weeks. congrats on the ipo
That's true. Certainly not drinking the koolaid here. But trying to understand the rationale why so much trash about Lyft and not other money losing ipos like Okta. Is it because lyft is a well known brand compared to okta? Or its tough competition with Uber?
What’s Lyfts growth plan? They are only focused on US right? Are they hoping to just take more share from Uber? Or are they hoping people will get more Lyfts then they currently do? Or are they going to start Lyft Eats? I don’t see much of a growth opportunity and they would definitely need to grow to get to the $27 billion valuation. Maybe they can reduce costs but I’m guessing most of their spend is on engineers and cloud spend so they can’t cut those if they plan on growing
Ride sharing industry is growing faster. There is certainly room for two players. To bring in more revenue, all Lyft has to do is keep growing at the same rate or better than the industry. Profitability is a WIP. Let me stop at that.
Yeah there are a lot of places that don’t have Lyft or uber drivers yet so plenty of room to grow there.
it's a taxi service.
Okta is SaaS with predictable revenue (reoccurring revenue) and high margin ( low cost of goods). Lyft is low margin (constant competition with uber means lower prices = lower margin). Lyfts business/market share can disappear overnight if uber drives prices down. There is no long term strategy or sustainability...
No one gives a damn if the ride share industry is growing if it’s a 0 margin business.
Okta could be overvalued too, they just aren’t getting lots of news coverage
Lyft has no market differentiator or customer lock-in. Uber can lower prices and steal every customer. A new competitor can arrive and steal every customer. Self driving cars could arrive and price you out of the market, etc. Okta at least has an element of vendor lock in because once you’ve integrated them, it’s a pain to replace. They’re also B2B which typically means longer contracts and billing horizons than B2C. But Okta is probably overvalued too. Back in the old days you wouldn’t try to IPO with a loss. We’re in a bubble again.
🍿️