For investors looking at Lucid stock, the post-earnings environment represents a make-or-break moment.
As market sentiment fluctuates in response to its latest quarterly report, with shares falling more than 10% on Tuesday, many are wondering what’s next for Lucid Motors (NASDAQ:) and its stock?
Clear breakdown of income
Lucid Group reported first-quarter loss per share of ($0.30), which was $0.05 worse than analysts’ estimates of ($0.25) after Monday’s close. Meanwhile, revenue for the quarter was $172.7 million, missing the consensus estimate of $173.57 million.
The company produced 1,728 vehicles in the first quarter and said it plans to produce about 9,000 vehicles annually. Additionally, 1,967 vehicles were delivered during the quarter, up 39.9% from the first quarter of 2023.
The company also raised $1 billion in funding in the first quarter through a private placement of subsidiary PIF.
“We continue to make significant progress in our cost optimization programs,” Gagan Dhingra, interim chief financial officer of Lucid, said in the earnings release. “We are focused on significant growth as we enter the next phase of transformation of Lucid’s end markets while maintaining cost discipline.”
Clear stock forecast for 2024
Reacting to Lucid’s latest quarterly report, analysts at RBC Capital asked whether some investors were expecting an upward revision to guidance as the company’s shares rose 10% ahead of the release.
Assessing the company’s deliveries, RBC reported that when annualized, total first-quarter deliveries of 1,967 units would amount to 7,900 units.
“We believe the financial results for the first quarter are less concerning,” the company said. “The focus is on demand for the Gravity SUV, which management believes has a 6x TAM compared to its sedans. Additionally, the company was able to secure $1 billion in financing from a subsidiary of PIF, bringing liquidity to $5 billion at the end of the first quarter.”
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RBC Capital maintained a Sector Performance rating and $3 per share price target on Lucid.
Elsewhere, Evercore ISI maintained its Inline rating and $2 per share price target on the stock. The company said the “harsh reality” for the company will continue.
“Q1 details were broadly consistent, while the big surprise was the emergence of further details on the timing of the ‘end-26 SoP’ for the ‘mid-market platform’, which is what Lucid will need to eventually see scaled volumes and further growth. brand acceptance (starting price ~$48K),” Evercore said.
Despite some positives, Evercore says “LCID stock is still a long way from being an investment story in the short term.”
They believe the first quarter did little to answer the question of what to do with the stock.
While they note that the Gravity is an attractive premium product with a starting price of less than $80K for a luxury SUV, the firm says the LCID’s sales volume issues were never related to quality and they “remain unconvinced that recognition brand is where it should be.”
“It’s hard to be optimistic,” Evercore said. “On the other hand, LCID has key advantages: 1) strategic partner in PIF (owns over 60% and will likely increase stake over time), meaning bankruptcy/liquidity risk is minimal and 2) minimal technology/intellectual valuation ownership, resulting in shares remaining in limbo (shares have remained unchanged since the beginning of the year).”