Lucid Motors (NASDAQ: LCID) is a small California manufacturer looking to make its mark in the electric vehicle sector. Despite having less than 2,000 full-time employees and no cars currently on the road, the company has a market cap exceeding $40 billion and is among the hottest EV startups in Silicon Valley.
Having successfully raised funding for a number of years, Lucid Motors went public in 2021 under the name Lucid Group and trades under the ticker symbol LCID. After beginning as a battery manufacturer, the company eventually entered into full electric vehicle production and announced its first entry, the Lucid Air, will be delivered in Q4 this year.
Where does LCID go from here? Regulatory tailwinds are certainly a boost and the company could have success with it’s first vehicle, but the EV space is crowded and picking winners and losers will prove difficult.
LCID Stock Market Position
Lucid Motors has been around since 2007, but the company only recently made its way into the public sphere. The company went public earlier this year through (what else) a merger with a Special Purpose Acquisition Company (SPAC) called Churchill Capital Corp, which made headlines of its own in early 2021 after meme stock traders bid the stock (then CCIV) up to more than 400% its original price of $10. By the time the company actually announced its merger with Lucid, the shares began plummeting and the stock became a social media pariah.
Today the memories of the Churchill Capital craziness have faded and the stock trades as LCID on the NASDAQ Exchange. The company currently sports a market cap north of $40 billion, which may not seem large compared to industry stalwarts like Tesla Motors (NASDAQ: TSLA), but is a tremendous number compared to some smaller competitors like Fisker Inc. (NYSE: FSKR), ChargePoint Holdings (NYSE: CHPT) and Lion Electric (NYSE: LEV), all of which clock in at under $10 billion.
Market capitalization is a better barometer for future growth prospects than stock price because it includes more data about the value of the firm. Stock prices can be high or low, but it doesn’t tell us anything about the number of shares in circulation. Market cap multiplies stock price by number of outstanding shares to form a more crisp picture of a firm’s value and growth potential.
CitiGroup Analyst’s Bull Case for LCID Stock
CitiGroup initiated coverage on the stock in early September with analyst Itay Michaeli giving the stock a BUY rating and a price target of $28. In his analysis, Michaeli recommends the stock because he sees lots of parallels to EV juggernaut Tesla: technical skills and credentials, history in the space, brand recognition and the anticipated launch of the Lucid Air vehicle. Additionally, the company has other potential profitable wings in battery production that could fuel growth in the next few years.
Morgan Stanley Analyst’s Bear Case For LCID Stock
Not everyone is excited about the prospects of LCID shares, however. Morgan Stanley analyst Adam Jonas has an underweight rating on the stock and a price target of $12, which represents a 50% haircut from current levels. Jonas is bearish on the stock because it’s market cap has exceeded a rational valuation and the competition in the EV space could leave Lucid out in the cold.
LCID Stock Price History
LCID’s chart shows both its time as the SPAC Churchill Capital Corp and its current iteration as Lucid Group. After shooting up near $65 near the beginning of March, the stock leveled off after the announcement of the deal with Lucid Motors and the shares were rechristened and began trading as LCID at the end of July.
The stock has mostly been range bound since it’s trip to the moon in March, bouncing from the $16 range to the $28 range without ever breaking out. However, after getting nearly no volume for most of the spring and summer, activity has picked up since the beginning of September, but the spike in volume hasn’t yet created a corresponding spike in stock price. Perhaps this simply coincides with the impending delivery of the first batch of Lucid Air vehicles, but a volume increase is rarely a bad sign.
Where to Buy LCID Stock
Looking to add Lucid Group stock to your portfolio? LCID may be a newcomer to American capital markets, but with over 1.6 billion shares outstanding, you shouldn’t have any trouble locating it at a reputable brokerage firm. Here are a few of Benzinga’s favorites for investors of all skill levels.
How Long Will it Take for LCID Stock to Reach $65?
Churchill Capital Corp, the SPAC predecessor to LCID, shot from $10 to $65 in a short period of time last winter and many traders are looking for the stock to return to this level as LCID. Of course, these investors could be waiting a while. LCID already has a market cap that dwarfs the majority of its peers.
And while it’s introducing its first vehicle to the market, the EV field continues to get crowded. Getting to $65 would require the stock to gain more than 100% from here, so investors should temper their short-term expectations.
Market Cap Could Hamper Future Returns
Lucid Motors has a reputation in the industry thanks to its successful battery products, but it remains to be seen whether their vehicles will make an impact. With a market cap over $40 billion, the company may have gotten ahead of itself due to market euphoria. Electric vehicle makers have been hot trades with similar stocks like LEV and NIO seeing big short-term boosts.
But if we’re looking at LCID as a long-term investment, it’s important to consider the market cap in comparison to the company’s actual size and sales projections. Lucid Motors certainly has potential, but it may be hard for the stock to reach its previous highs when it was a SPAC meme darling. To get back to that level, LCID will likely need to do it the old fashioned way, by becoming profitable.
Frequently Asked Questions
Is LCID stock a good investment?
It depends on your view of the company. The tailwinds in the EV space are undeniable, but LCID only has a single vehicle in production and they’re yet to hit the road. An investment in LCID right now means an investment in pure potential. Make sure you like the leadership and direction of the firm before putting capital to work.
Is LCID an American company?
Yes. LCID is the common stock of Lucid Motors, headquartered in Newark, California. The stock is traded on the NASDAQ Stock Exchange.