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The Lyft logo is seen on a ride-hailing car in New York, on March 4, 2019.Mike Segar/Reuters

Lyft Inc’s stock 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 favour of relying on ride-hailing services.

Shares of the money-losing San Francisco company fell as much as 4.2 per cent to $66.10 on Tuesday, their second straight session of losses after a hotly anticipated $72 initial public offer on Friday. The stock was down 2.3 per cent 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 Lyft with a “sell” rating and a $42 price target, with analyst Michael Ward calling the stock’s current valuation a “leap of faith” that consumers will forego owning cars in favour of using ride-hailing services.

“Despite the optics of vehicles being an underutilized asset, 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 Lyft, with two of them recommending the stock and three assigning neutral ratings.

Those five analysts on average expect Lyft’s revenue to jump 60 per cent to $3.45-billion in 2019, while Ward estimated 2019 revenue would reach $3.40-billion.

Lyft reported a loss of $911-million in 2018, wider 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.

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