Lucid Motors Analysts Trim Price Targets After Q1 Earnings: Worries Over EV Maker's Future Trigger Discussion Of 'Licensing Model'

Zinger Key Points
  • Lucid analysts lower their price targets after first-quarter earnings.
  • Many questions remain for the future, including funding needs and what happens if vehicles don't sell well.

Electric vehicle company Lucid Group LCID reported first-quarter financial results that saw revenue and earnings per share come in below consensus Street estimates. Here’s a look at what analysts are saying about the first quarter and future production.

The Lucid Motors Analysts: Needham analyst Chris Pierce has a Buy rating and lowered the price target from $16 to $10.

Cantor Fitzgerald analyst Andres Sheppard has an Overweight rating and lowered the price target from $13 to $10.

Related Link: Trading Strategies For Lucid Stock After Q1 Earnings 

The Lucid Motors Takeaways: The first-quarter financial results were worse than “low expectations,” Pierce said in a note. 

“We continue to see value in LCID’s EV technology, particularly vs. legacy OEM EV technology, but the window for LCID to prove customers will respond to their vehicles is closing given company liquidity constraints,” the analyst said.

The analyst said Lucid is lowering its full-year vehicle production guidance and is now calling for 10,000 units versus a previous range of 10,000 to 14,000.

During the earnings report, Lucid said it will show off its Lucid Gravity SUV later this year, with a launch planned for 2024. 

The analyst sees this and the upcoming Dream Ahead Tour event as potential catalysts to drive consumer interest and increase confidence from investors before Lucid requires additional capital.

Another option if confidence doesn’t improve for customers and investors could be a licensing model, Pierce said. 

“A licensing model becomes necessary to drive near term revenues and improve margins if LCID needs to reboot its consumer message again ahead of the Gravity SUV launch.”

Sheppard lowered the price target for Lucid after the automaker posted lower-than-expected revenue in the first quarter and lower production guidance for the full year.

“Recall that the company produced and delivered 7,180 and 4,369 vehicles, respectively, in FY22, above our 2022 production estimate of 6,500, and above company guidance of 6,000-7,000 vehicles,” Sheppard said.

The analyst highlighted the Gravity SUV slated for 2024. 

“Recall that the Lucid Gravity is a seven-seater SUV. Management expects the Gravity SUV to provide customers with ‘game-changing range, faster charging speed, voluminous interior space and an unrivaled combination of luxury and performance.’”

The company’s technology is a key differentiator, he said. 

“We continue to believe that the Lucid’s vehicles are able to provide greater battery efficiency, longer battery range, faster charging and more interior space relative to other passenger EVs, which are important differentiators, in our view.”

LCID Price Action: Lucid shares are down 7.91% to $7.10 Tuesday. 

Read Next: Lucid's Q1 Miss: Elon Musk Spells Out 'Easy,' 'Hard' And 'Excruciating' Parts Of Making EVs

Photo courtesy of Lucid Motors. 

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Posted In: Analyst ColorEarningsNewsPrice TargetReiterationTop StoriesAnalyst RatingsMoversTrading IdeasAndres SheppardCantor FitzgeraldChris Pierceelectric vehiclesExpert IdeasLucid AirLucid GravityNeedham
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