American electric vehicle (EV) manufacturer Lucid Group (LCID) has reported a wider-than-expected loss for the third quarter of 2021. Also, revenues missed analysts’ expectations.
Results in Detail
Lucid reported a loss of $0.43 per share against the Street’s loss estimate of $0.25 per share. The company had reported a loss of $6.64 per share in the prior-year quarter.
Additionally, quarterly revenues of $232,000 missed the consensus estimate of $1.25 million and decreased 30.5% year-over-year. (See Lucid stock charts on TipRanks)
Meanwhile, customer reservations rose to 13,000 in the third quarter, reflecting an order book of about $1.3 billion. Lucid also commenced the expansion of AMP-1’s manufacturing capacity, which is expected to provide production capacity for up to 90,000 vehicles per year by the end of 2023. This will expand Lucid Air production capacity and add production capacity for the “Project Gravity” SUV.
Furthermore, during the quarter, the company expanded its footprint to 13 locations aligning with its expected customer demand. To create global demand for its products, the company plans to expand its retail and service network in Canada by the fourth quarter of 2021, EMEA by 2022, and China by 2023.
As of September 2021, the company had cash and cash equivalents worth $4.8 billion.
Outlook
Looking forward, the CEO of Lucid, Peter Rawlinson, said, “We see significant demand for the award-winning Lucid Air, with accelerating reservations as we ramp production at our factory in Arizona. We remain confident in our ability to achieve 20,000 units in 2022. This target is not without risk given ongoing challenges facing the automotive industry, with global disruptions to supply chains and logistics. We are taking steps to mitigate these challenges, however, and look forward to the launch of the Grand Touring, Touring, and Pure versions of Lucid Air through 2022.”
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Wall Street’s Take
On November 10, Bank of America Securities analyst John Murphy maintained a Buy rating on the stock and increased the price target to $60 (33.69% upside potential) from $30 on increasing momentum of EVs in the market.
Consensus among analysts is a Moderate Buy based on 2 Buys and 1 Sell. The average Lucid price target of $33.33 implies 25.74% downside potential from current levels. Shares have gained 145.1% over the past six months.
Risk Analysis
According to the new TipRanks’ Risk Factors tool, the Lucid stock is at risk mainly from three factors: Finance and Corporate, Production and Legal and Regulatory, which contribute 35%, 25%, and 16%, respectively, to the total 85 risks identified for the stock.
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