Stifel analysts cut the stock to hold from buy and lowered their price target on the San Francisco company to $35 a share from $38.
The new target indicates less than 7% upside from the stock's Friday closing price of $32.73.
The San Francisco ride-hailing company's shares at last check were off 6% at $30.76.
"In reviewing our investment case for Lyft, we are challenged to continue to recommend shares at this time given the likely slow and uncertain path to recovery for the domestic ride-hailing market," said analyst Scott Devitt.
While Lyft was able to top analyst estimates last week, the company did say that rides were down 75% year over year for the month of April, including a 70% decline in the last week of the month.
While Lyft still expects stabilization and improvement from April levels, the company still forecasts revenue declines of 62% for the second quarter and 28% for the third quarter, both from a year earlier.
Stifel says it is cautious on the company's rate of recovery and will be monitoring ride-hailing trends to see whether consumer demand is changing.
"We continue to support the company given secular growth trends, profit generation potential, and an innovation-focused team," Devitt said. But the shares "are more fairly balanced on a risk/reward basis given significant near-term headwinds."
Despite the April slowdown, Lyft was still able to report revenue grew in the first quarter.
Lyft reported $955.7 million in total revenue, an increase of 23% year over year and higher than analyst consensus estimates calling for $882 million.
Lyft posted a loss of $1.32 a share for Q1, versus a consensus estimate of a loss of $1.31.