Written by Cláudio Afonso | LinkedIn | X
Electric vehicle (EV) maker Lucid Motors is facing a challenging financial trajectory, according to a new research note from Cantor Fitzgerald sent on Friday. The firm has reiterated its price target of $4 on the company’s stock implying an upside potential of 12% based on the previous closing price.
Despite an increase in second-quarter revenue estimates, the analyst Andres Sheppard remains cautious about the EV maker’s profitability outlook.
Cantor Fitzgerald has revised its 2Q24 revenue forecast for Lucid to $210.2 million, up from a previous estimate of $173.8 million. This adjustment comes in response to Lucid’s 2Q pre-announcement and places the new estimate significantly above the FactSet consensus of $167.4 million. However, the firm’s annual revenue projection for FY24 remains steady at $724.2 million.
Lucid will host a conference call to discuss its second quarter 2024 financial results on August 5 at 5:30 pm eastern time immediately after releasing its Q2 report.
Sheppard highlights Lucid’s technological strengths, noting that its vehicles offer superior battery efficiency, longer range, better performance, and faster charging compared to other passenger EVs.
Yet, these advantages have not translated into financial success. The analyst maintains an Underweight rating on Lucid shares, citing the company’s slower-than-expected production ramp-up and persistently high negative gross margins, which exceed -100%.
“We continue to believe that Lucid’s vehicles offer greater battery efficiency, longer battery range, better performance, and faster charging relative to other passenger EVs,” Sheppard wrote.
“However, we remain Underweight given the company’s slower-than-expected ramp-up in production, high persistent negative gross margins, and the company’s additional capital needs,” he added.
One of the most concerning aspects of Lucid’s financial health is its gross margins. Cantor Fitzgerald does not expect Lucid to achieve positive gross margins until the first half of 2026 at the earliest. This prolonged period of negative gross margins underscores the significant operational and financial hurdles the company faces.
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Additionally, Lucid’s capital requirements remain a pressing issue. The company is funded only until the second quarter of 2025, suggesting that additional capital raises will be necessary to sustain operations and continue its growth trajectory.
A few hours after announcing that the 2025 Lucid Air has become the most efficient electric vehicle in the world, Lucid‘s co-founder and CEO Peter Rawlinson attended the Fortune’s Brainstorm Tech
Rawlinson commented on the reported financial support from Elon Musk to the former President Donald Trump calling it “another salient example of his level of distraction”.
The EV maker reported last week the delivery of 2,394 vehicles in the second quarter of the year, while producing 2,110 units, beating expectations from Wall Street analysts.
Written by Cláudio Afonso | LinkedIn | X
