JP Morgan adds Lyft to its top internet picks, joining Netflix, Amazon and Facebook

Published Fri, Nov 15 201910:42 AM ESTUpdated Fri, Nov 15 20194:00 PM EST

Wall Street is not giving newly public ride hailing company Lyft enough credit, according to J.P. Morgan. Following its third-quarter earnings, Lyft just landed a spot on J.P. Morgan's top internet picks list, alongside streaming company Netflix, e-commerce giant Amazon and tech titan Facebook. "LYFT reported significantly better than expected revenue and EBITDA, as it continues to take share of an increasingly rational US rideshare market, thereby accelerating its path to profitability," said J.P. Morgan internet analyst Doug Anmuth in a note to clients. Last month, Lyft released its third quarter earnings , where it beat on both the top and bottom lines, as well as raised its revenue guidance for 2019. As the company is not yet profitable, Lyft lost $1.57 per share, less than the $1.66 expected, according to Refinitiv. Revenue came in at $955.6 million, topping estimates of $915 million. Lyft also reiterated its expectations for profitability by the end of 2021, but J.P. Morgan believes Lyft's core ride-sharing business can be profitable "well before that, likely sometime in 2020," said Anmuth. "We continue to believe that the Street is not giving these companies enough credit," Anmuth said about recent unprofitable IPOs. Lyft is down about 40% since its IPO in March, but rose 2.67% on Friday. Lyft joins Amazon and Facebook on J.P. Morgan's list and following the mega-cap's third-quarter earnings, the firm said "secular trends remain strong across online advertising and ecommerce." Amazon missed on the top line and beat on revenue and Facebook beat on earnings, revenue, daily active users and average revenue per user for its third-quarter earnings. "We expect strong growth across the mega-caps in 4Q, albeit with some moderation relative to recent qtrs," said Anmuth. Amazon is up more than 16% this year and Facebook is up nearly 50% since January. J.P. Morgan is getting the most questions about streaming platform Netlflix, as more competition like Disney+ enters the space. But the firm said Netflix's growth remains strong as its revenue accelerated for the 3rd straight quarter to more than 35%. Share of Netflix are up 10% year-to-date. —with reporting from CNBC's Michael Bloom.

Confetti falls as Lyft CEO Logan Green (C) rings the Nasdaq opening bell celebrating the company's initial public offering (IPO) on March 29, 2019 in Los Angeles, California.

Mario Tama | Getty Images

Wall Street is not giving newly public ride hailing company Lyft enough credit, according to J.P. Morgan.

Following its third-quarter earnings, Lyft just landed a spot on J.P. Morgan's top internet picks list, alongside streaming company Netflix, e-commerce giant Amazon and tech titan Facebook.