Lucid Group (NASDAQ:LCID) stock has been getting no love from the markets, and its Q1 earnings report did little to improve its standing. Despite a recent seven-day rally, the stock has regularly faced declines. This pattern continued on Tuesday when Lucid shares tumbled 14% after the Q1 earnings failed to convince investors the story is about to finally take a favorable turn.
Deliveries reached 1,967 vehicles in the quarter, up almost 40% year-over-year and resulting in revenue of $172.7 million. That amounted to a 16% improvement compared to the same period last year but fell short of expectations by $9.74 million. At the other end of the equation, the company showed a loss of $0.30 per share, missing the analysts’ forecast by 5 cents.
Looking ahead, Lucid stuck to its 9000 vehicle production guide for the year. However, Needham analyst Chris Pierce commented that citing “industry seasonality,” the company appeared “less bullish on the trajectory of units for the rest of ’24.”
Instead, Lucid struck an upbeat tone regrading future models vs the current lineup, with the anticipated debut of the Gravity SUV in 2025, although their midsize sedan wouldn’t be available until 2027.
Despite the prevalent view that Lucid’s tech is amongst the best in the business, its cars have failed to gain traction and that is obviously a problem for the company and investors alike. That is also essentially why Pierce remains on the sidelines for now.
“We continue to be believers in LCID’s best in class technology driving industry leading efficiency (LCID vehicles combine higher mileage ranges with lower kWh battery pack sizes vs OEM peers), but we also continue to see low absolute delivery numbers, limiting fixed cost absorption driving financial statement losses and driving further capital needs,” the analyst explained. “LCID spoke confidently to consumer awareness and potential purchase intent ahead of their TAM expanding Gravity SUV launch, with their midsize mass market sedan soon to follow, but we continue to think investors will take a conservative posture when considering the low penetration of LCID’s existing lineup.”
All told, then, Pierce keeps his Hold (i.e., Neutral) rating in LCID intact without having a fixed price target in mind. (To watch Pierce’s track record, click here)
Most of Pierce’s colleagues agree with his stance. Based on a mix of 6 Holds, 2 Sells, and 1 Buy, the analyst consensus rates the stock a Hold. However, going by the $3.21 average target, a year from now, shares will be changing hands for a ~21% premium. (See LCID 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.
