After exploding on the scene final yr, Lucid Group (Nasdaq: LCID) is trending once more earlier than earnings on February 28. With LCID inventory down over 27% to date this yr, is now the time to purchase?
The luxurious EV maker is usually in comparison with rival Tesla (Nasdaq: TSLA) within the method it’s taking. That stated, Lucid’s first EV, “Lucid Air,” is being named MotorTrend’s 2022 Automobile of the Yr. Often known as the “Golden Caliper’s,” the award is taken into account one of the vital extremely regarded honors within the trade.
With this in thoughts, EV shares are taking a backseat after main the market post-pandemic. The KraneShares EV ETF (NYSE: KARS) is down 13% as traders take income in an overheated market.
On the identical time, consultants predict the EV market shall be one of many fastest-growing markets within the subsequent a number of years. Provided that EV gross sales look to achieve near 30% of recent automobile gross sales by 2030 from 3.4% in 2021, there’s a ton of room for development.
Hold studying to be taught what position Lucid plans to play within the EV market and what to anticipate from LCID inventory.
LCID Inventory: What to Anticipate From Lucid’s This autumn Earnings
Lucid Motors is at an thrilling level in its enterprise cycle. The corporate is transitioning from growth to manufacturing because the Lucid Air Dream Version begins hitting the streets. The deliveries began in October because the group personally welcomed prospects.
In line with Yahoo Finance, analysts predict the next in This autumn:
- EPS: (-0.35)
- Income: $36.74 million
But as the corporate ramps manufacturing, it can nonetheless be shedding cash. That stated, it could possibly be one other yr earlier than we see a gross revenue.
That being stated, Lucid expects to promote 20,000 EVs in 2022. However the firm additionally notes the goal will rely upon a number of ongoing points like provide chain points and manufacturing means.
Talking of provide chain points, on Tesla’s This autumn earnings name, CEO Elon Musk says a number of trade challenges exist. First, essentially the most limiting issue is the chip scarcity, making it arduous to get the units wanted to energy EVs.
Secondly, port challenges make it costlier to get provides on time. Tesla famous a “important improve in expedited prices,” particularly for distinctive components.
On prime of this, Lucid plans on launching one other three fashions this yr, all of which would require particular components. Then again, Tesla is sticking with its present fashions to deal with whole car output.
It is going to be fascinating to see which technique is extra profitable on the finish of the yr. Will Tesla maintain on to its dominant lead within the EV market, or will Lucid creep into its market share?
Battle of The U.S. EV Makers
In case you missed the tremendous bowl between the Rams and Bengals, (spoiler) the Rams gained. However the largest takeaway wasn’t from the sport. It was from the commercials. It was evident of the altering occasions with EVs and crypto dominating advert time in the most well-liked sporting occasion within the U.S.
For a 30 second advert, the price is round $7.5 million as over 100 million viewers tuned in. Because the trade continues constructing momentum, that is doubtless the brand new regular.
One other key level to contemplate is Biden’s “Rebuilding our Manufacturing to Make Extra in America” speech. Within the speech, Biden addresses his needs for America to grow to be the worldwide chief in EVs. Particularly, he identified rivals Tesla, Rivian (Nasdaq: RIVN), GM (NYSE: GM) and Ford (NYSE: F).
Though Lucid didn’t get a shout-out, the corporate plans on taking part in a significant position within the rising EV market. That stated, the Lucid will face stiff competitors because it seems to be to seize a bit of the posh EV market.
Tesla is main U.S. luxurious automobiles with over 936,000 vehicles delivered in 2021. Lucid could have an extended approach to go in catching up, nevertheless it’s not unattainable.
We are going to see if the corporate can overcome Tesla’s points in what turned generally known as “manufacturing hell.”
Lucid’s Benefit
Though Lucid is simply getting its ft on the bottom, it does have a bonus. The auto trade is famously recognized for slender margins and its excessive barrier to entry.
Then again, Lucid is making a higher-end car in its award-winning Air. With this in thoughts, premium automobiles typically provide extra income and better margins. Not solely that, however like Tesla, the EV maker is coming in with a powerful fame.
The corporate claims its Dream Version R has a 520-mile vary. If that is so, it can beat out the Tesla Mannequin S, recognized for its long-range means (405 miles).
The additional 115 miles could possibly be an enormous draw for some. However, it’s additionally $74,000 greater than the Tesla Mannequin S, which you’ll be able to order at any time. So, it actually will come right down to if patrons need the additional bells and whistles that include the Air.
To this point, Lucid is following in Tesla’s footsteps in some ways. But the corporate stands aside as nicely.
Initially, Lucid is doing nicely in delivering on its guarantees. Transparency can go a great distance in attracting prospects in addition to traders.
LCID Inventory Forecast: Will Lucid Bounce Again?
The upcoming quarter and yr shall be crucial for Lucid Motors. To this point, LCID inventory is down over 30% this yr, with EV shares falling.
With this in thoughts, LCID inventory is sitting beneath its 200-day SMA, an indication of additional weak point. Nonetheless, the EV maker wants a strong quarter to offer it any energy. Though Lucid won’t be turning a revenue, the steering going ahead shall be most vital.
If Lucid continues delivering on its guarantees and stays on monitor this yr, count on LCID to regain some momentum. Then again, traders are fleeing high-valued development shares with no income to handle threat.
That stated, if Lucid fails to ship, we may see extra strain on LCID inventory this yr. Lucid shares are nonetheless up from their 52-week low of round $16. However they appear to have discovered assist round $25-$28.
Till earnings on February 28, don’t count on an excessive amount of. Then after earnings, we must always see if LCID inventory has any likelihood of bouncing again this yr.
Pete Johnson is an skilled monetary author and content material creator who makes a speciality of fairness analysis and derivatives. He has over ten years of non-public investing expertise. Digging by 10-Okay varieties and discovering hidden gems is his favourite pastime. When Pete isn’t researching shares or writing, you’ll find him having fun with the outside or working up a sweat exercising.