Electric vehicle (EV) maker Lucid (NASDAQ:LCID) is scheduled to announce its second-quarter results after the market close on Monday, August 7. Following a disappointing Q2 2023 deliveries report last month, analysts will now focus on the company’s cash burn, margins, and management’s commentary about demand.
Ahead of the Q2 results, Lucid slashed prices of its EVs amid intense competition and a price war triggered by Tesla (NASDAQ:TSLA). The company lowered the price its Air Pure sedan by $5,000 to $82,400, with the offer being valid “while supplies last.” Additionally, Lucid reduced the prices of its Touring and Grand Touring models to $95,000 and $125,600, respectively, marking a cut of $12,400 each.
Analysts’ Q2 Estimates for Lucid
Last month, Lucid reported Q2 2023 production and deliveries of 2,173 and 1,404 vehicles, respectively. These numbers marked a decline compared to the first quarter production and deliveries of 2,314 and 1,406 vehicles, respectively, and sparked concerns about the demand for the company’s EVs due to their high price points and macro challenges. Lucid’s Q2 deliveries also lagged analysts’ consensus estimate of over 1,800 vehicles.
For the second quarter, analysts expect Q2 2023 loss per share to widen to $0.34 from $0.33 in the prior-year quarter. They project revenue to increase to $181.6 million compared to $97.3 million in Q2 2022.
Investors are concerned about the growing losses and cash burn. Lucid’s cash and cash equivalents fell to $900 million at the end of Q1 2023 from $1.74 billion at the end of 2022. In early June, Lucid shares declined when the company announced that it was raising capital of about $3 billion, with two-thirds of that amount coming from Saudi Arabia’s Public Investment Fund (PIF). It is worth noting that PIF owns more than 60% of Lucid.
In July, Bank of America analyst John Murphy resumed coverage of Lucid with a Hold rating and a price target of $8. The analyst reduced his Q2 2023 and full-year earnings before interest and taxes (EBIT) estimates to reflect the weak Q2 deliveries. However, Murphy did not make any significant adjustments to his estimates for 2024 and beyond.
The analyst said that he plans to revisit his expectations following additional commentary during the second-quarter earnings call.
Is Lucid a Good Stock to Buy?
Wall Street’s Moderate Buy consensus rating on Lucid stock is based on three Buys and three Holds. The average price target of $8.67 implies about 31% upside. Shares are down 3% year-to-date.
Insights from Options Trading Activity
TipRanks now presents options activity to help investors plan their trades ahead of earnings releases. Options traders are pricing in a 14.2% move on Lucid earnings. LCID shares have averaged a (5.4)% move in the last seven quarters. In particular, the stock declined nearly 6% following the Q1 2023 results announcement, as the company reported a wider-than-anticipated loss per share and also missed revenue expectations.
The anticipated move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
