Electric vehicle start-up
Lucid
reports third-quarter numbers on Tuesday evening amid a rough patch for the company and the industry. Investors will want to see signs that demand for Lucid’s high-end EVs is turning around.
For the quarter, Wall Street projects a per share loss of 40 cents from sales of about $178 million, according to Bloomberg. Lucid (ticker: LCID) reported a 40-cent loss from sales of $151 million in the second quarter of 2023.
A loss isn’t surprising. Investors want to see improvement. The company is expected to have used about $890 million in cash building its business in the third quarter, down from $900 million used in the second quarter of 2023. Wall Street projects cash use of about $900 million to $1.1 billion for each of the next few quarters.
Slowing cash burn would be a good sign. Higher production goals would also be welcome.
Lucid produced 1,550 units in the third quarter and made about 6,000 in the first nine months of 2023. That leaves about 4,000 to make in the fourth quarter to hit full-year production guidance of about 10,000 units.
Wall Street seems skeptical. Analysts project fourth-quarter deliveries of about 2,600 units. Deliveries and production should closely mirror one another.
Spear Invest founder Ivana Delevska tells Barron’s that part of Lucid’s issue is its product lineup. Lucid sells higher-end vehicles that can cost more than $100,000. When
Tesla
(TSLA) started selling its high-price Model S in 2012, it was essentially the only EV seller of significance. Now the market segment is crowded with many high-end sedans from auto makers including Tesla,
Mercedes-Benz
(MBG. Germany),
BMW
(BMW. Germany), and others.
Through midday trading Monday, Lucid shares are down about 35% over the past three months while the
S&P 500
and
Nasdaq Composite
were both off about 3%.
Part of the decline is related to weak production. Investors have been worried about slowing EV demand after weak earnings reported by Tesla on Oct. 18. That report was followed by
Ford Motor
(F) and
General Motors
(GM) slowing EV-related spending and weak fourth-quarter sales guidance from EV supplier
ON Semiconductor
(ON).
Lucid management hosts a conference call at 5:30 p.m. Eastern time to discuss results and the outlook.
Options markets imply the stock will move roughly 12%, up or down, after earnings are reported. shares have moved about 12%, up or down, on average following the past four quarterly reports. Shares have moved up once and fallen three times over that span.
Lucid ended the second quarter with about $5.2 billion in cash and investments on its books. Lucid’ts market capitalization is about $10 billion. Adjusted for debt and cash, Lucid is worth some $6 billion, or about 9 times estimated 2024 sales. Tesla trades for about 6.7 times estimated 2024 sales. Lucid peer
Rivian Automotive
(RIVN) trades for about 2 times estimated 2024 sales.
Write to Al Root at [email protected]
Read the full article here