Shares of Lyft fell for a second straight day, this time after an analyst raised concern over the ride-hailing company's valuation.

Michael Ward, an analyst at Seaport Global Securities, initiated coverage of the stock with a sell rating and a 12-month price target of $42 a share. Ward's price target implies a 39.1 percent downside from Monday's close of $69.01. Lyft shares fell as much as 4.2 percent before ending the day down 0.1 percent at $68.67. It priced its IPO Thursday evening at $72.

For Ward, the wildcard surrounding Lyft is its valuation. "In order to justify its current market valuation, investors need to take a big leap of faith that the millennials and later generations will forego ownership of a car and opt instead for reliance on a ridesharing service," he said in a note, adding he believes people will continue to own cars and use ride-sharing services as a "convenient supplement."

"While we believe the ridesharing market will continue to grow and expect LYFT to be a prime competitor, in our view, current valuations reflect an overly optimistic view of consumer behavior in the US," Ward said.