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Now is not the best time to sell an EV, especially if it’s an expensive EV.those are the types Lucid Group (NASDAQ:LCID) sold, but if the latest quarterly update means anything, it once again didn’t help the company’s case much.
The luxury electric car maker’s fourth-quarter results failed to lift already depressed sentiment, sending the stock down 17%. Revenues decreased 38.9% year over year to $157.51 million, missing consensus estimates by $24.25 million. The company reported a loss of $654 million, or 29 cents per share, compared with a loss of $473 million, or 28 cents per share, in the year-ago period, which was in line with street expectations. did.
After producing 8,428 vehicles in 2023, the company notes that demand is still more of an issue than supply, with 2024 guidance factoring in production of around 9,000 vehicles. The Arizona manufacturing plant will be able to produce 30,000 vehicles a year, expanding to 90,000 vehicles once Phase 2 is complete.
The company also said the low-cost mid-size car is scheduled to go into production at the end of 2026. Baird’s Ben Caro predicts the model will go head-to-head with Tesla’s Model 3/Y in size and price point, and analysts think so. He will “significantly expand LCID’s TAM (management is talking about a potentially 20x larger market)”.
Kallo also thinks the Lucid Air Pure’s recent 10% price reduction to $69,990 is a good move. “Cash generation and sales growth are concerns for early-stage manufacturers, but this reduction could stimulate demand as we close the gap until initial production of the Lucid Gravity SUV later this year,” he said. I believe there is,” he said.
Overall, analysts have a balanced view on Lucid’s future prospects. “Q4 results were below our/consensus estimates as LCID weathered a challenging environment for high-end EVs,” the analyst summarized. “While we continue to believe in LCID technology, we see 2024 as a challenging year with high interest rates and high prices for LCID vehicles.”
So far, Caro has lowered his price target to $4 from $6, while maintaining a “neutral” rating. Still, it could rise up to 31% from current levels. (Click here to see Kallo’s track record)
Mr. Caro’s views are echoed by most of his colleagues. The stock asserts a Hold consensus rating based on a combination of 7 Holds and 2 Sells. That said, many believe the stock is somewhat undervalued. Achieving an average price target of $5 would mean the stock would trade at a 47% premium in 12 months. (look Clear stock price prediction)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. Content is for informational purposes only. It is very important to perform your own analysis before making any investment.
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