Is Lyft Stock a Good Investment?

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Lyft (NASDAQ:LYFT)

19.176

1.0261 [5.65%]
18.18 – 19.57
17.24 – 63.07
18.28
347.98M
9.64M/9.81M
6.67B
347.98M
/0%
0.000
252.08M

The ride-share industry is still going strong in America. When Lyft went public in March 2019, investors were excited to finally be able to buy stock in the popular industry. It’s important to evaluate the risks and benefits before making any investment, including buying stock in Lyft. Read on how to buy Lyft stock and what to consider first to help you prepare.

How to Invest in Lyft 

The stock market can be intimidating but worthwhile if you do your research and get it right. First, you should understand your investment options.

Direct Investment 

A direct investment is an investment designed to gain enough equity in a company to give you sufficient control of the company. These investments often involve more than money and interest. As an investor, for example, you could add international businesses to an already existing business. This could include expanding a franchise outside of the U.S. It could also include adding a similar or unrelated business operation in another country.

Brokerage 

If you’re just getting started in investing, or even if you’re more experienced, an investment brokerage can be a great asset. Brokers act as the jobber between you as the investor and the buyers and sellers on the stock market. 

If you decide to work with a broker, you’ll be able to decide how much involvement you want them to have. These are 2 types: 

Discount broker: Think of a discount broker as a machine that simply processes your orders. Discount brokers don’t review your portfolio or provide any investment advice to you. You will be left to make your own investment and trading decisions. This is often a much more affordable option for investors.

Full-service broker: A full-service broker is what you should use if you’d like to receive advice and support when it comes to your investments. You can meet with your full-service broker to discuss your investment goals. Your broker will then do the research for you to offer you the best and most personalized advice to help meet your goals. If you use a full-service broker, we recommend finding one that has a fiduciary duty. A fiduciary duty means that your broker is legally responsible to put the interests of its clients before their own interests. If your broker has a fiduciary duty to you, it means that they cannot give you advice that will give them 3rd-party commissions or otherwise benefit anyone other than you. 

What steps do you need to take now to buy Lyft stock?

Step 1: Choose your brokerage

You’ll need to decide which type of brokerage you want to work with. Do you want a local broker who can give you personalized advice? Would you prefer an online broker? You may also want to consider brokerage fees. Be sure to do your research before deciding which brokerage you’d like to work with. Evaluating your needs and comparing this with reviews is a great way to find the best broker for you. 

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Step 2: Open your trading account

Once you’ve chosen the brokerage you’d like to work with, you’ll need to open your trading account. You should be able to visit the brokerage agency’s website and click on the “Open an Account” button to get started. Then, you’ll select the account type you want to open and provide basic personal information such as your name and address. 

After taking the initial steps to set up your account, you should receive a confirmation email. You’ll need to click on the link in your email to confirm your account. To prevent financial fraud, you will also need to send in proof of identification. 

Step 3: Add funds to your account

Once your account is confirmed, you will be able to add funding to your account. On your broker’s website, log into your account. You can then deposit funds into your account using various payment methods. Be sure to only add funds that you can afford to lose if your investment does not pan out the way you hope.

Step 4: Access your trading platform
Next, you’ll want to access your trading platform. Your broker will give you the account information you need to do so. 

You’ll be able to choose between the desktop and mobile versions of the trading platform. If you want to use the desktop version, you will download an installation file from your broker’s website. When you launch the file, it will go through the installation process and create an .exe file on your desktop. You can then launch the trading platform and log in using your account information.

If you use the mobile app, you will simply download the app, launch it and log in with your account information. 

Now, you’re ready to actually buy some stocks!

Step 5: Buy Lyft stock.

Finally, you can make your Lyft investment. Lyft has a trading symbol of Lyft, so it should be easy for you to find in the market watch of your trading platform. When you find it, click on it to open the trading box.

Next, select the number of shares you want to buy in Lyft. You may want to consult your broker or a financial advisor to help you decide how much to invest. As a general rule, we recommend that you don’t invest all of your money in a single trade. 

When you’ve made your selection, apply it to the fields in the trading box and implement the trade.

Pros to Buying Lyft Stock 

  • Slim competition: Since ride-sharing is still relatively new, Lyft doesn’t have much competition. It’s only major competition is Uber, a company that has encountered several accusations in the past year. If Uber continues to lose its customers’ trust, it’s likely to boost Lyft’s stock price.
  • Future opportunities: Lyft has built a significant amount of partnerships with AV tech companies, including Aptiv. This partnership was formed to provide more than 50,000 self-driving rides. When thinking of the future, it looks like Lyft may be in a good position to be at the forefront of exciting new opportunities.

Cons to Buying Lyft Stock 

  • Age factor: Lyft is a newer company on the stock market. This means that even though there may be huge growth potential, there are also risks. You cannot track a long-term stock performance history.
  • Profit loss: At this point, Lyft is not yet turning a profit. While the company expects to become profitable within the next year, the exact turning point remains to be seen.

Is Lyft Worth Buying? 

The best way to determine whether you should buy Lyft stock is to do some research and consider speaking with your broker or financial advisor.

In the grand scheme of things, Lyft is still a newer company and hasn’t been on the stock market for long. If you don’t like to invest in newer companies and don’t particularly like to take risks, Lyft may not be the preferred stock for you. 

However, there are some factors that work in its favor. Lyft’s business model is primarily focused on North American markets, whereas its main competitor Uber has a more diversified business model. Lyft is seeing steady market share growth and it is projecting to become profitable in the upcoming years. If you feel comfortable buying stock in a company that is showing promise, you may want to consider Lyft.

History of Lyft’s Stock Price 

On Lyft’s opening day on the stock market — March 29, 2019 — its opening price was $87.33. By closing that day, the price was $78.29.

Is Lyft a Good Investment?

The best way to choose the best broker is to understand how comfortable you are with making investment decisions. If you’re looking for a broker who can also act as an advisor, you might want to go with a full-service broker. Although these brokers tend to cost more, they can do most of the legwork for you and help you get on the right path.

If you’re a little more comfortable with the stock market, you might want to opt for a discount broker. With a discount broker, you are on your own to make your investment decisions. Some discount brokers may also offer the option to ask a broker for advice on a particular trade. This can be a great option if you’d like the option for assistance from time to time.

No matter which broker you choose, be sure to do your research to ensure that your broker or brokerage firm is reputable. Remember, if your broker has a fiduciary duty to you, this means they are legally bound to act in your best interests alone.