Tuesday, 6 August 2024, Bengaluru, India
Lucid Motors (NASDAQ: LCID) declared Q2 results during the earnings call on August 5. The most eye-catching part of the announcement was yet another massive cash injection – this time it was a whopping $1.5 billion from the Saudi Public Investment Fund (PIF). Despite this news increasing investor confidence, other indicators in this report signal differently.
Image Source: LUCID
Signaling Investor Optimism
The additional $1.5 billion PIF’s investment has endowed Lucid with a vast amount of working capital. It strengthens its balance sheet and provides backing to its aggressive expansion strategy. On this news, LCID stock rose up 5.67% in pre-market trading. This came after a recent loss of 3.85% in the latest trading session and has caused the closing price per share to be $3. This pre-market ‘pop’ put the stock price at $3.39, implying market confidence in Lucid’s prospects.
Adjusted Loss per Share and EBITDA Loss
Based on the full-year results, Lucid posted an adjusted loss per share of $0.29 which is below the estimated loss of $0.27. This fact points to the fact that the company continues to face difficulties attaining operating profits. The adjusted EBITDA loss
remained at $647.6 million, which is higher than the estimated loss of $560.9 million. This has come down by 8.8% from the previous year. That is why Lucid has achieved sound revenue growth, though controlling its expenses remains one of the critical factors.
July Advancement and Relative Strength Index
For July, there was positive movement in LCID stock with the stock hitting a high of $4.32 far beyond major resistance levels at $3.93 and $3.40. However, the trading sessions of the past few days resulted in some downward movement which brought the stock back down to $3. LCID shares are currently in the range of the previously established upper limit of $3.40 coupons and support at $2.55. Any further decisive move past these levels could mark a reversal or affirmation of the trend. The decreasing RSI signal also supports the presence of a bearish outlook on the market at the moment. Since it’s high on July 16, the RSI declined and is now at 43, suggesting that this EV stock may be oversold.
Wall Street Analysts
The Wall Street analysts analyzing both the fundamental positions of the Company and macroeconomic factors cannot overemphasize LCID stock. The average price target for this stock is $3.01, meaning that there is only a 0.3% from the latest closed prices.
Growth Drivers for Lucid Motors
Lucid’s first car model is the Lucid Air which has impressive features such as advanced technology, unique interior and exterior design, and power. The targeted customers appreciate long distances on a single charge, a large interior, and enhanced functionality. Lucid focuses on producing batteries that have high storage capacity and energy density. It has battery management, motor control, and other systems merged into a single Lucid DreamDrive platform for maximum performance.
Compared to some competitors, the company maintains certain functions of its supply chain, such as battery manufacturing. Thus, the advantages of vertical integration include improved control of costs and quality. Lucid’s ambitions for growth are focused exclusively on the U.S. market. Expansion in Europe and other areas will be useful for sales increase and brand recognition. Partnerships with organizations such as Saudi PIF (Public Investment Fund) help fund expansion and advancements in technology. Lucid aims for the high-end EV market by catering to people with high demand for line performance, quality, and environmental responsibility. For instance, Lucid focuses on increasing the number of charging stations available to consumers so that they feel comfortable and can easily find a place to charge their vehicles.
Conclusion
Even with more cash and higher delivery, Lucid still has its problems. Even technical analysis and Wall Street analysts are not optimistic about the situation. Thus investors will keenly follow, how Lucid is advancing toward profitability and becoming a market leader for electric vehicles.
