Lucid collection today
(As of 12/18/2024 at 05:45 PM ET)
- 52 week range
- $1.93
▼
$4.84
- Price target
- $3.16
Lucid Collection Nasdaq:LCID The stock price is recovering from a new low hit in November, indicating a bottom. However, the company’s risks remain, and the downtrend is intact, so investors should be cautious. A move back above $2.70 in mid-December is promising but it has yet to clear the critical resistance point near $2.90. This level corresponds to the lower edge of the gap formed in October and the 150-day moving average, which may provide strong resistance to rising prices. The reason for the decrease in the gap was the offering of new shares. The company says the market misinterpreted the move, but it is difficult to misinterpret the easing measures from a company struggling to gain strength.
Lucid Group Dilutes Stock: Stock price headwinds are getting stronger
Lucid’s stock dilution is great. The company relied heavily on easing measures in 2023 and 2024, selling a significant portion of shares to the Saudi Public Investment Fund while also raising capital on the open market. As a result, there are now more than 1 million shares of redeemable preferred stock on the books. The company’s deficit increased by 25% from the beginning of the year until the end of the third quarter, shareholders’ equity was halved, and book value deteriorated significantly. At the end of the third quarter, the company’s book value was just over $1.15 per share, less than half its trading price in mid-December. Regarding the Saudi Public Investment Fund, it owns about 60% of LCID shares and may end up owning the entire company very soon. The ultimate goal for Saudi Arabia is to bring the automobile industry and employment opportunities to its people.
Ignoring the dilution, Lucid’s balance sheet is in good shape. The company posted cash backlog compared to the prior year’s third quarter and had enough cash to sustain operations for about a year at its third-quarter burn pace. However, the company’s cash has declined since the beginning of the year despite stock sales, lower inventory, lower current and total assets, and higher liabilities. Total liabilities are up 30% year-to-date and are likely to grow because it will take more than four quarters for Lucid to become profitable. Investors should expect another round of easing measures in 2025.
Lucid Group stock forecast today
$3.16
24.73% upHe catches
Based on 9 analyst ratings
| High expectations | $4.50 |
|---|---|
| Average expectations | $3.16 |
| Low expectations | $2.00 |
Lucid Group stock forecast details
The Q4 report may provide a catalyst for the stock price. Analysts expect another quarter of double-digit growth, but there are problems. First, analysts raise their pre-release estimates and raise expectations to a high level; Outperformance is unlikely. Add to that the sequential decline in revenue and slowing year-on-year growth, and chances are high that the report will not be a success. In terms of analysts’ stock price targets, the consensus estimate for the stock price is above $3 but trending lower, providing a market headwind. The revision trend indicates that the fair value is below $3 and may decline before it starts to rise. Analyst trends are unlikely to improve significantly in 2025 without a strong indication that demand is strong, production is increasing to meet it, and cash flow is improving.
Aside from the Saudi Public Investment Fund, institutional activity cannot be relied upon to help support this market. Institutions other than PIF own only 9% of the stock, and although activity is mixed, the balance is net bearish for the stock. Additionally, short interest is very high at 30%, making the sell-side headwinds strong and perhaps insurmountable. In this scenario, shares of LCID stock may rise but will likely set the market up for the next downturn.
Changing electric car makers will lead to industry consolidation
Electric vehicle manufacturers are currently changing hands, with some going bankrupt and others merging with other companies. Lucid is currently in talks with other auto OEMs, seeking partnerships to help it control costs and expand its presence in the electric vehicle market. One possibility is for Lucid to share its advanced powertrain expertise against supply chain considerations to leverage efficiencies of scale. Rivian competitor Nasdaq: Raven Likewise cooperates with Volkswagen. It also dilutes its value to investors.
Before you consider Lucid Group, you’ll want to hear this.
MarketBeat tracks the highest-rated and best-performing research analysts on Wall Street and the stocks they recommend to their clients on a daily basis. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches up… and Lucid Group wasn’t on the list.
While Lucid Group currently has a “Hold” rating among analysts, the top-rated analysts think these 5 stocks are better buys.
View the five stocks here
Click the link below and we’ll send you a MarketBeat guide to investing in 5G and the 5G stocks that show the most promise.
