Lyft just nabbed another glowing Wall Street recommendation - here's why the analysts aren't worried about the stock's terrible performance so far

• Wells Fargo has launched analyst coverage of Lyft with a $60 price target, in line with the rest of Wall Street's optimism.
• Shares of Lyft have fallen more than 46% since the stock began publicly trading in March.
• The bank says Lyft has plenty of potential for stealing market share from Uber thanks to its singular focus on the United States.
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Lyft hasn't been riding high since it went public back in March.

The stock is down more than 46% in trading, as the company continues to lose money while investing heavily in order to keep growing. Still, Wall Street has remained overwhelmingly positive on the stock.

That was still the case Friday, when Wells Fargo analysts joined a consort of other banks in launching coverage of the stock with an outperform rating and price target 40% above where shares are currently trading.

Key to their thesis, as you might expect, is the elephant in the room: Uber.

"Investors bullish on app-based ride hailing business must decide whether LYFT, a U.S. pure-play, can overcome its second-mover status and capture its fair share of future ecosystem profits," the team lead by Brian Fitzgerald said in a note to clients.

"Market share runners-up in platform businesses have not, historically, benefitted from network effects to the same degree the market leader, ultimately resulting in lower growth and profitability."

The bank doesn't expect that to be the case for ride-hailing though, which most industry experts see as still in an extremely nascent stage. Instead, it all comes down to how much market share Lyft can grab from Uber.

That runway could be huge, too, considering that Wells Fargo estimates the total addressable market for trips to be 9.7 billion by 2028. (For context, Lyft gave 619 million rides in 2018, it said in IPO filings.)

But massive potential doesn't come without risks.

Beyond Uber, there are plenty of competitors in spaces that Lyft operates in, like bikes, scooters, and self-driving cars, even if those units are still immaterial to the company's financial position.

"A substantial number of companies are developing autonomous vehicle technology that could represent direct competition to current LYFT business model, including Alphabet (Waymo), Apple, Baidu, Uber, and Zoox," Wells Fargo said. "These companies may be able to devote greater financial resources to the development and commercialization of new autonomous vehicle technology."

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