(Reuters) - Shares of ride-hailing company Lyft Inc rose as much as 4 percent on Friday, setting the stock for its best day since its market debut last week, after short-seller Citron Research advised investors to hold on to the stock.

FILE PHOTO: Lyft supporters gather for the Lyft IPO as the company lists its shares on the Nasdaq in the first-ever ride-hailing initial public offering, in Los Angeles, California, U.S., March 29, 2019. REUTERS/Mike Blake/File Photo

The number of active Lyft riders has surged fivefold to 18.6 million in the fourth quarter of 2018, from the first quarter of 2016, and those numbers are set to rise further, Citron said, listing several other reasons to not be short on Lyft.

As of Thursday, Lyft’s short interest was $937 million, with 13.38 million shares shorted, which makes up about 41.2 percent of its float, according to data from S3 Partners, a financial technology and analytics firm.

Citron, which has held a stake in Lyft for the last two years, said it has increased its position in the company in the open market.

Describing ride-sharing as a “megatrend”, and not just a fad, Citron said Lyft has good prospects, especially since millennials are foregoing car ownership for ride-sharing.

“This is not a trendy video game or a GoPro camera... this is a way of life that is saving people time and ensuring safety,” the note said.

“The entire rideshare market in the U.S. only accounts for 1 percent of miles traveled today…. we have only just begun,” Citron said.

But brokerage Seaport Global, which started coverage on Lyft with a “sell” rating on Tuesday, said it was skeptical that consumers will give up car ownership in favor of relying on ride-hailing services.

Daiwa Capital Markets also initiated coverage on the company on Thursday, with an ‘outperform’ rating and a price target of $80.

The rating reflects strong revenue growth potential ahead for the company, the brokerage said, but added it expects losses to increase through 2020, and then reach break even by the end of 2022.

Lyft’s shares fell below their IPO price of $72 on their second day of trading, erasing all debut gains, after market research companies cited lack of a clear path to profitability.

The company did not mention when it would turn profitable. It reported a loss of $911 million in 2018, wider than its $688 million loss in 2017, despite revenue doubling in 2018 to $2.16 billion.

Daiwa added autonomous robotaxis, currently under development at tech and auto companies, are among the biggest threats to the company.