Lucid Group peels off 11% as concerns over demand, cash flow pick up
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Lucid Group (NASDAQ:LCID) fell sharply in early trading on Tuesday as investors and analysts continue to react to the Q1 earnings report.
The general view is that Lucid Group's (LCID) issues ramping production are not too overly surprising given the complexity of launches and ongoing supply chain snarls. However, concerns over customer demand and cash flow have increased.
Needham reiterated a Buy rating on Lucid Group (LCID), but lowered the price target on Q1 results viewed as modestly worse to the low expectations coming in. "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," noted analyst Chris Pierce.
Morgan Stanley called the Q1 results disappointig with consensus misses on margins, cash burn, and outlook. While the electric vehicle maker said has enough liquidity on hand to support the company through Q2 of 2024 at least, analyst Adam Jonas asks if management can bridge the funding gap from the Air model to Gravity model.
Bank of America reiterated a Neutral rating on LCID. Analyst John Murphy and team view LCID as one of the most attractive among the universe of start-up EV automakers because it has class leading powertrain tech along with other key pieces of the puzzle. However, the firm expects it could take until 2027 or longer for LCID to breakeven on an operating and cash flow basis and project it will need to raise more than $10B in capital.
Shares of Lucid Group (LCID) fell 10.77% in premarket action on Tuesday.
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