Lucid group (NASDAQ:LCID) 17% drop today in sympathy with many other names of speculative electric vehicles such as Rivien (NASDAQ:RIVN) and Fisker (NYSE:RSF).
Reality is starting to set in as investors begin to question Lucid’s pricing and scalability. Currently trading with a market cap of $ 73 billion, Lucid’s third-quarter revenue was $ 232,000. Additionally, Lucid reported a third quarter loss per share of 43 cents. Investors should realize that the road to profitability is clearly a long way off.
On the bright side, Lucid announced that it had exceeded 17,000 bookings for its Air model, up from 13,000 earlier in the third quarter. The company also plans to produce at least 20,000 vehicles in 2022 and is currently expanding its AMP-1 manufacturing facility to increase production. Plus, the Lucid Air won the 2022 MotorTrend Car of the Year award, which is sure to attract potential consumers – and media coverage.
Is the momentum around electric vehicle names slowly fading? Let’s take a look at what the experts are saying about LCID stock.
What do LCID stock experts think?
- Bank of America has a price target of $ 60, a Wall Street high. Analyst John Murphy thinks Lucid could be the “next Tesla or Ferrari”. The price target of $ 60 was calculated based on a multiple of 8.5 times the value of the business and sales using sales estimates from 2025.
- Citi has a target price of $ 57. Analyst Itay Michaeli has expressed confidence in Lucid’s third quarter results and the 2022 production target. Additionally, he believes Lucid’s advanced technology is gaining notoriety and commercial popularity.
- Morgan Stanley has a target price of $ 16. Analyst Adam Jonas reiterated his fears about Lucid’s ability to evolve in the future, as well as current supply chain disruption issues. Jonas also said that Lucid will likely miss their internal production targets for 2030 as well.
- Finally, Lucid has an average price target of $ 33 across 3 companies covering the stock.
Lucid is currently trading at close to $ 44. It appears analysts are divided on either side of the spectrum, with Bank of America and Citi having high upside targets, while Morgan Stanley is more skeptical of its lower target. Only time will tell which side of the analysts is right.
For now, Lucid remains a highly speculative, unprofitable game with market capitalization based on future cash flows.
At the time of publication, Eddie Pan had (directly or indirectly) no position in any of the stocks mentioned in this article. The opinions expressed in this article are those of the author, submitted to InvestorPlace.com Publication guidelines.