Analyst Spots These Concerns After Tesla Rival’s Cash Burn, EV Price Rises Investors’ Business Daily

lucid (LCID) confirmed its production target for 2022 after the ambitious Tesla (TSLA) challenger delivered 360 Lucid Air EVs in the first quarter amid supply disruptions. Lucid stock rose higher Friday.


For the first quarter, Lucid posted nearly $58 million in revenue, driven by 360 EV deliveries during the quarter, the startup said in its late release of results on Thursday. That suggests a small increase from 125 EV deliveries in the fourth quarter of 2021 amid “global supply chain and logistics challenges, including Covid-related factory closures in China,” the company statement said. Lucid began shipping the luxury electric sedan Air on October 30 last year.

Lucid reported 30,000 Air EV reservations on May 5. That was more than 25,000 reservations in February and represents a total potential sale of $2.9 billion.

In addition, LCID maintained its previously reduced 2022 production target of 12,000-14,000 EVs. However, it announced price increases of as much as 13% on Thursday for new reservations beginning in June.

LCID’s quarterly cash burn totaled $870 million, leaving it with $5.39 billion in cash at the end of the first quarter, which will fund the company through 2023, according to Thursday’s release.

In a note to customers Friday, CFRA analyst Garrett Nelson flagged Lucid’s “challenges in terms of achieving significant sales volumes given vehicle pricing and a likely future capital increase.” These offset the quality of the Lucid Air EV, Saudi Arabian support and new Arizona factory, he said.

Nelson maintained his stance on LCID stock, but lowered his price target by $5 to $20 a share.

Lucid joined EV startups Fisker (FSR) and Nikola (NKLA) in reaffirming key manufacturing and supply targets despite the global chip shortage.

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Lucid profit

estimatesAnalysts polled by FactSet expected Lucid to lose 33 cents a share on revenue of $55.6 million. There are no figures for a year ago.

Results: Lucid lost 5 cents a share on sales of $57.7 million.

OutlookAnalysts expect Lucid to sharply narrow net loss per share to $1.22 for the full year, from a loss of $6.41 per share in 2021. Revenue rises to $1.275 billion in 2022, from $27.1 million last year. The figures for 2021 are only three quarters.

Arizona-based Lucid began production of the award-winning luxury Lucid Air in the fall of 2021. But like other automakers, the company has faced significant delivery and logistics challenges.

Starting in June, Lucid will increase the price increases for several Air models by a whopping 13%.

“Looking ahead, we remain intently focused on ramping up production,” said Lucid CEO Peter Rawlinson in Thursday’s release.

On April 26, Lucid announced that the government of Saudi Arabia will purchase up to 100,000 Lucid EVs over a 10-year period. The Saudi sovereign wealth fund is one of the main LCID stakeholders. Rawlinson called the deal “another pivotal moment” for his company, which Wall Street generally considers a viable Tesla competitor.

Lucid Stock, Nikola Stock

Lucid shares fell 3.8% to 18.14 in the stock market today, well below key tech support levels. Shares of Lucid fell nearly 7% Thursday before the earnings report.

Nikola shares fell more than 9% on Friday after a 6.4% jump on Thursday. Fisker shares jumped 4.7% after losing 6.1% Thursday.

All three new EV stocks remain well below the 200-day mark. Relative strength lines for Lucid stock and its EV startup peers are showing severe slowing, a sign of underperformance against the S&P 500 index.

Tesla shares initially rose 1.5% on Friday and then fell to small losses. The stock fell more than 8% on Thursday.

Nikola, Lucid Updates

On Thursday, Nikola announced that it will begin production of the Tre electric semi-truck on March 21. NKLA continues to expect 300-500 EV deliveries this year. The EV startup is testing a hydrogen-powered Tre truck with a longer range, expected in the second half of 2023.

In the first quarter, net loss rose to 21 cents per share, compared to 14 cents a year ago. Nikola reported $1.9 billion in services revenue. Analysts expected Nikola to lose 25 cents a share in token earnings.

In September 2020, short seller Hindenburg Research targeted Nikola stock, accusing it of “an ocean of lies”. Nikola now runs under new top management.

Fisker confirmed late Wednesday that it expects to begin production of the Ocean SUV on November 17. It works together with magna (MGA) on production. Fisker reported that Ocean reservations now stand at over 45,000, an increase of about 50% from February.

In the first quarter, Fisker lost 41 cents a share versus estimates for a loss of 39 cents and a loss of 11 cents a year ago.

Find Aparna Narayanan on Twitter at @IBD_Aparna


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