Lucid Group (NASDAQ:LCID) investors have endured a torrid time for several years now; after all, it hardly gets much worse than a share price drop of 95% over a 3-year period.
So, it’s mostly been down days on a non-stop basis for the luxury EV maker and Friday amounted to another one of those following the release of Q3 earnings.
However, the reaction seems somewhat unjustified given the company’s positive results. Revenue reached $200.4 million, reflecting a 45.4% year-over-year increase and surpassing expectations by $2.26 million. Additionally, adjusted EPS came in at -$0.28, beating the consensus estimate by $0.03.
Scanning the results, Stifel analyst Stephen Gengaro hails a “solid” print, noting some key takeaways. For one, the company stuck to its 2024 production guide of 9,000 vehicles. “This implies a step-up in production during 4Q24,” opined the analyst, “and we continue to believe the company’s production target reflects expectations for sales.”
Orders have also opened in the U.S. for the Gravity SUV Grand Touring trim, with a starting price of $94,900. Production is on course to begin later this year, with the vehicle giving the company access to the “critical SUV segment.” Although Lucid offered no comments on initial customer orders, Gengaro expects more details on deliveries over the coming months. The company plans to offer the Gravity Touring trim, priced at $79,900, to customers by late 2025.
Furthermore, management expressed confidence in the company’s liquidity position, with $5.16 billion expected to sustain operations until at least mid-2026. They also lowered the 2024 capital expenditure guidance from $1.3 billion to $1.0 billion. Looking ahead, Lucid aims to launch a mass-market midsize vehicle by late 2026.
Lastly, Lucid demonstrated progress in cost management, with a sequential gross margin improvement from -134% to -106%, signaling a continued “laser-focused on aligning production with demand while controlling costs.”
“Overall,” Gengaro summed up, “we believe Lucid’s 3Q24 print and guidance are modestly positive for the shares.”
Investors, however, seemed unconvinced. Does Gengaro think it’s a buying opportunity? Surprisingly, he maintained a Hold (i.e. Neutral) rating on Lucid stock, though his Street-high price target of $4 suggests a potential 80% upside in the year ahead. (To watch Gengaro’s track record, click here)
Among Gengaro’s peers, 2 analysts recommend selling, while 5 join him on the fence, resulting in a Hold consensus rating. The average price target of $3.20 suggests most analysts believe the stock is undervalued, projecting a 12-month upside of 44%. (See Lucid stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
