Lucid Group Faces Profitability Risks, Stock Could Plummet to Zero
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
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Source: Fool
- Uncertain Profitability: Lucid Group is struggling on its path to profitability, with expectations of not achieving it until at least 2028, which makes the company vulnerable amid uncertainties in EV sales, potentially impacting investor confidence.
- Funding Dependency Risk: The Saudi Public Investment Fund (PIF) owns about 60% of Lucid and has invested nearly $5.8 billion over the past two years to maintain its stake; however, if PIF stops investing, Lucid could face a severe cash crisis.
- Market Competition Pressure: With increasing competition in the U.S. EV market, Lucid's cash burn rate is accelerating, and without additional funding, it risks bankruptcy and could be acquired at a fire-sale price by another automaker.
- Investor Confidence Erosion: Should PIF decide to cease its investments, Lucid would lose its largest investor, likely triggering panic among other investors and exacerbating the risk of a stock price collapse, potentially driving it close to zero.
Analyst Views on LCID
Wall Street analysts forecast LCID stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LCID is 18.82 USD with a low forecast of 10.00 USD and a high forecast of 30.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
1 Buy
9 Hold
2 Sell
Hold
Current: 10.050
Low
10.00
Averages
18.82
High
30.00
Current: 10.050
Low
10.00
Averages
18.82
High
30.00
About LCID
Lucid Group, Inc. is a technology company, which designs, engineers, and manufactures electric vehicles (EVs), EV powertrains, and battery systems in-house using its own equipment and factories. It sells vehicles directly to consumers through its retail sales network and through direct online sales. Its vehicles include Lucid Air and Lucid Gravity. Lucid Air is an advanced car, featuring powertrain technology. It offers 420 miles of the United States Environmental Protection Agency (EPA)-estimated range, with an 84-kWh battery pack. The Lucid Air Sapphire is the highest-performance version of the Lucid Air, boasting 1,234 horsepower from three motors, 427 miles of an EPA-estimated range (when equipped with standard wheel covers). The Lucid Gravity provides the interior space and practicality of a full-size SUV within the exterior footprint of a mid-size SUV. It provides space for up to seven adults. It has engineered the Lucid Gravity to deliver up to 450 miles of EPA-estimated range.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
