There hasn’t been much to shout about for Lucid Group (LCID) investors over the past few years. The stock has been a big loser, with shares constantly shedding value as the company has failed to turn its critically acclaimed luxury EVs into big sellers.
But could Lucid finally be turning a corner? Investors sent shares up earlier this week, after the company exceeded expectations in its Q2 delivery update.
Lucid delivered a record 2,394 vehicles during the quarter, thereby beating the Street’s projection of 1,915 units while showing strong year-over-year growth of 71%. For the second consecutive quarter, deliveries also outpaced production, which reached 2,110 vehicles in Q2.
That is a feat of some importance, says Baird analyst Ben Kallo. “We view deliveries outpacing production as a positive for LCID as it will improve cash flow and reduce the drag of inventory,” the analyst explained. “While there is still significant work to be done towards achieving positive margins, we are encouraged by the improving inventory management and note that there are potential catalysts ahead.”
Those could come in several forms. Later this year, at the AMP-1 manufacturing facility in Arizona, production is slated to begin on the second vehicle in Lucid’s lineup, the Lucid Gravity SUV. Another potential catalyst could come in the form of a licensing deal for the company’s technology.
Additionally, Kallo also notes the company is on the lookout for a full-time CFO, with the analyst expecting a replacement will to be named “in the near-term.”
However, the strong delivery haul is not yet enough to move Kallo off the sidelines. The analyst reiterated a Neutral rating on the shares while his $3 price target suggests the stock will stay rangebound for the time being. (To watch Kallo’s track record, click here)
Lucid will announce its full Q2 results on Monday, August 5th, once the market action comes to a close.
Meanwhile, most of the Street’s analysts agree with the Baird view here. Based on 6 Holds, plus 2 Sells, the stock claims a Hold consensus rating. At $3.30, the average target is a bit more bullish than Kallo’s objective, and makes room for 12-month returns of 7%. (See Lucid stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
