What should I do with Lucid stock after it turns a profit? Analyst Response By Investing.com

For investors looking at Lucid stock, the post-earnings environment represents an important turning point.

With the stock down more than 10% on Tuesday and market sentiment shaken by its latest quarterly report, many are wondering what’s next for Lucid Motors (NASDAQ:) and its stock.

Clear profit details

Lucid Group reported a first-quarter loss per share of $0.30 after the close on Monday, $0.05 worse than analyst estimates of $0.25. Meanwhile, revenue for the quarter totaled $172.7 million, compared to the consensus estimate of $173.57 million.

The company said it produced 1,728 vehicles in the first quarter and plans to produce about 9,000 vehicles per year. We also delivered 1,967 vehicles this quarter, an increase of 39.9% compared to the first quarter of 2023.

Additionally, in the first quarter, the company raised $1 billion through a private placement to a PIF affiliate.

“We continue to make significant progress in our cost optimization program,” Gagan Dhingra, Lucid’s interim CFO, said in the earnings call. “We are focused on significant growth as we enter the next phase of transformation for Lucid’s end markets while simultaneously driving cost discipline.”

Clear stock outlook for 2024

In response to Lucid’s latest quarterly report, RBC Capital analysts questioned whether some investors were expecting a 10% rise in the stock to lead to an upward guidance revision.

Evaluating the company’s deliveries, RBC said that the total number of deliveries in the first quarter, 1,967, would be equivalent to 7,900 on an annualized basis.

“We believe there are fewer concerns about our first quarter financial position,” the company said. “Management is focused on demand for the Gravity SUV, which we believe has six times the TAM compared to sedans. Additionally, the company was able to secure $1 billion in financing from a PIF affiliate, increasing its liquidity to $5 billion at the end of the first quarter.”

RBC Capital maintained a Sector Perform rating and $3 per share price target on Lucid.

Elsewhere, Evercore ISI maintained its inline rating and $2 per share price target. The company said the “harsh reality” for the company would continue.

“Details for the first quarter were generally consistent, but a big surprise came as additional timing details emerged for the ‘late ’26 SoP’ for ‘mid-size platforms’. Brand adoption (starting price ~$48,000),” Evercore said.

Despite pointing out a few positives, Evercore says “LCID’s stock is still far from a short-term investable story.”

They believe the first quarter did little to answer the question of what to do with stocks.

Gravity points out that the luxury SUV is an attractive premium offering with a starting price of less than $80,000, but LCID’s quantity problem wasn’t about quality, and “we’re not confident that brand awareness is where it needs to be,” the company says.

“It’s hard to be bullish,” says Evercore. On the other hand, LCID has key advantages: 1) being a strategic partner of PIF (over 60% owned and likely to increase stake over time), i.e. bankruptcy/liquidity risk; This is minimized and 2 ) the valuation floor considering technology/IP, capital remains uncertain (equities are flat YTD).”