It has been a tough year for ride-sharing stocks.
Uber Technologies Inc UBER is down 43.27% year to date, while LYFT Inc LYFT is down 75.9% year-to-date against the benchmark S&P 500 SPY's 19.66% dropo.
The situation is even worse for Getaround Inc GETR, which went public via SPAC in early December.
Shares of Getaround have shed 94.81% of their value since the Dec. 9 IPO — but that could represent a steep discount, according to analysts at Piper Sandler who initiated coverage on the stock with an Overweight rating.
Getaround has an addressable market of $100 billion, according to the analyst firm.
The Getaround Analyst: Alexander E. Potter initiated Getaround with an Overweight rating and $1.50 price target, implying upside potential of 194.2%.
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“We think Getaround's car sharing platform is well-suited to an environment characterized by unaffordable cars, cash-strapped consumers, and congested roads,” Potter said in a Thursday note.
The analyst continued, “the company's digital model addresses the friction involved in traditional vehicle rental by facilitating instantaneous, contact-free transactions. This model has enabled GETR to become the 2nd largest peer-to-peer vehicle sharing company, with 1.7M guests and 72k active vehicles.”
Getaround went public in December after merging with blank-check company InterPrivate II Acquisition Corp. That same day, share prices of Getaround fell more than 65%, owing to the unfavorable investment climate for both SPACs and ride-sharing businesses.
While Piper Sandler is bullish on Getaround’s potential, the investment firm said the company is going to have to raise additional capital within two years — and faces risks from poor public sentiment surrounding the peer-to-peer car sharing marketplace.
“In the meantime, the onus is on management to demonstrate cost discipline, revenue growth, and opex leverage,” Potter wrote.
GETR Price Action: Shares of Getaround Inc plunged 9.02% to 50 cents Thursday, according to Benzinga Pro.
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