Lucid Group stock price has staged a strong recovery in the past few months, helped by the recently launched Gravity vehicle and demand from bargain hunters. The LCID share price has soared by over 70% from its lowest level in November last year, pushing its market cap to near $10 billion. We explore whether the LCID stock price has more room to go.
Lucid Gravity as a catalyst
Lucid Gravity is the main reason why the LCID stock price has surged in the past few months. Gravity is a premium SUV aimed starting at $94,500 that aims to supplement its sedan vehicles that have become highly popular in the US.
The SUV targets a larger market that is interested in premium electric vehicles, but is less interested in sedans. Besides, most Americans prefer having larger vehicles, which explains why a company like Ford ended that manufacturing.
Still, it is still too early to predict whether Gravity will be a big success as the management expects. Besides, the industry has become highly competitive, with companies like Tesla and Rivian having a substantial market share.
LCID faces many challenges
Lucid Group faces numerous challenges that may derail its performance. The first one is that its vehicles depreciate so fast, a move that may prevent many people from buying the vehicles. A closer look at online forums shows that many buyers often regret when selling the vehicle after a few years.
One user bought a Lucid Air Grand Touring for $155,000 in 2022, only to find the best offer at $44,000. Many used car websites show that Lucid vehicles, like most EVs, depreciate faster than comparable internal combustion vehicles.
Depreciation has a big impact on consumer behavior. It prevents many consumers from buying a vehicle and pushes many into leasing instead.
Further, Lucid Group’s business is not growing as fast as expected. It produced 9,029 vehicles in 2024 and delivered 10,241, 5% of them were leases. That report showed that it produced 3,386 vehicles in the fourth quarter and delivered 3,099.
Lucid Group’s revenue rose to $200 million in the third quarter, up from $137 million in the same period a year earlier. Its nine-month revenue rose from $438 million to $573 million. However, the company continued to incinerate cash as its net loss rose to $991 million and $2.31 billion.
Analysts anticipate that Lucid’s full-year revenue will be $784 million, followed by $1.62 billion in the current financial year. Its losses will continue as analysts anticipate it to break even by 2028.
This cash burn means that the firm may be forced to raise cash in the next few years. It raised $1.75 billion in October last year as the management focused on growth.
Therefore, Lucid Group stock faces major fundamental challenges ahead. The upcoming earnings report on February 25 will likely provide more color about its performance and Gravity orders.
Lucid stock price analysis
The daily chart reveals that the LCID stock price has moved sideways in the past few months. It has found a strong bottom at $2.3, where it failed to drop below since May last year. This bottom is a sign that the stock has formed a descending triangle pattern, a popular bearish continuation sign.
On the positive side, this pattern could be a triple-bottom whose neckline is at $4.45. Therefore, the LCID stock price outlook is mixed for now. A strong bearish breakdown would see the stock crash below $2, while the triple-bottom is a bullish sign, with the next point to watch being at $4.45.
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