Is LCID Stock a Buy?

The announcement was made in early January, but CES was the first time consumers and investors saw the partnership in action. Soundhound’s technology will allow Lucid Assistant to respond to “Hey Lucid” prompts in the same way that consumers interact with Google. Alexa or Apple’s Siri.

Lucid Group today

$2.96 -0.05 (-1.66%)

01/14/2025 to 04:00 PM Eastern

52-week range

$1.93

▼

$4.43

Price target

$3.04

In addition to controlling critical features, the technology will include all the information in the owner’s manual, which can inform drivers about nearly every aspect of the vehicle’s functionality.

The announcement, coming on the heels of the company’s launch of the Gravity SUV, its first offering in the segment, was enough to send LCID stock up 17.4% in the 30 days ended January 14. However, the stock is now rebounding. Against the higher end of analyst estimates, Investors may have to wait until the company’s upcoming earnings report in February for better direction.

Lucid has cleared an important bar by bringing its EVs into production. The company stands out among Automotive stock for its blend of luxury and sustainability. In the first three quarters of its 2024 fiscal year, the company is on pace to deliver record sales and delivery numbers. An increase in production can be taken as a sign of increased demand.

However, the next hurdle is proving that it has an audience that allows for scalability. It will not be easy to clean him up. Lucid will produce a total of 9,000 vehicles in 2024. The good news is that it will beat its prediction. The caveat is that the number speaks to the premium price and commands a lucid vehicle.

Lucid operates in the luxury EV sector. Accordingly Mordor IntelligenceThe luxury EV market will be valued at $249.91 billion in 2025 and is expected to grow at a compound annual growth rate (CAGR) of 19.5%. This puts the estimated market size at $609.1 billion by 2030.

For context, if Lucid’s Q4 revenue is around the same $200 million it generated in Q3, the company’s full-year revenue will be around $775 million. That’s about 3% of the entire market at a time when Lucid is still unprofitable. However, analysts are projecting the company to generate revenue of around $1.6 billion in 2025, which highlights the company’s strength in the luxury EV market.

Lucid may have an uphill road to profitability, but there are some reasons for optimism. First, the company has strong backing from major investors like the Saudi Arabian Public Investment Fund (PIF).

This has helped Lucid increase its total liquidity to over $5.16 billion. And with total capital expenditures of about $1 billion in 2024, the company should be on solid footing through 2026. At that time, Lucid plans to launch a mid-size SUV that the company estimates will cost around $50K.

Meanwhile, the company will have to prove that it can improve its operating margins. To be clear, the company may not turn a profit anytime soon, but it must convince investors that LCID is profitable without further weakening the stock, as was seen in October 2024, when shares hit a 52-week low. level had been reached.

The EV revolution is real, with the number of vehicles set to increase as battery technology and infrastructure improve. However, optimistic projections alone do not justify owning LCID stock.

For that, you’ll need to believe that this $8.9 billion company will be able to become profitable or perhaps license some of its technology to generate more revenue, as in this case. Rivian Automotive Inc. NASDAQ: RIVN. The company has openly expressed its willingness to do so, but will have to find a willing partner.