Stocks to sell

Steer Clear of Lucid Motors Stock Before It’s Too Late

Electric vehicle manufacturer Lucid Group (NASDAQ:LCID) makes nice-looking cars, but the price action of LCID stock isn’t nice-looking at all. Sure, the perma-optimists can cherry-pick a positive data point or two, but overall, the bull case for Lucid Group is falling apart quickly.

You may have heard from Louis Navellier and the InvestorPlace research staff that Lucid Group’s CEO is getting a $6 million bonus. Are Lucid’s investors making any money, though? Sadly, Lucid stock is losing value rapidly even while the company’s chief executive is getting a huge payout. So, Lucid Group’s loyal investors may be frustrated and want to bail on the company – and frankly, I don’t blame them for feeling this way.

Will Lucid Group’s Price-Reduction Strategy Work?

Reportedly, Lucid Group slashed its vehicle prices three times in seven months. The company tried to put a positive spin on these price cuts. However, investors might wonder whether the price reductions are done out of desperation to compete with the multitude of EV manufacturers.

Remember, Lucid Group only delivered 6,001 vehicles in 2023. LCID stockholders had better hope that the company’s pricing strategy boosts Lucid’s EV sales. For 2024, Lucid Group expects to produce “approximately 9,000 vehicles.”

That’s production, not delivery. The 2024 EV-delivery total will inevitably be lower than the production number. Lucid Group’s full-year vehicle-production estimate of “approximately 9,000” is “far below consensus expectations,” according to RBC Securities analyst Tom Narayan.

The RBC Securities analysts expected Lucid Group to produce around 9,500 vehicles this year. So, if you assumed that Lucid would have a blockbuster year in 2024, don’t get your hopes up.

Lucid Group’s Mixed Results

Turning to Lucid Group’s fourth-quarter 2023 results, the automaker offered a few positive data points. Specifically, Lucid’s cost of revenue decreased from $615.291 million in the year-earlier quarter to $410.015 million in 2023’s third quarter.

Also, Lucid Group reported an earnings loss of $654 million, or 29 cents per share, in Q4 2023. That’s worse than the loss of $473 million, or 28 cents per share, in the year-earlier quarter. However, at least Lucid beat Wall Street’s Q4 2023 earnings-loss estimate of 30 cents per share, by a penny per share.

There’s more to the story, though. In the third quarter of 2023, Lucid Group’s revenue declined to $157.2 million, versus $258 million in 2022’s third quarter. This result fell short of the analysts’ consensus estimate of $180 million.

Finally, it’s worth mentioning that Lucid Group produced 8,428 vehicles in total in 2023. That’s close to the upper limit of Lucid’s full-year production guidance of 8,000 to 8,500 vehicles. But then, Lucid Group’s previous outlook called for production of “more than 10,000” EVs for 2023, and prior to that, as many as 14,000 EVs.

LCID Stock: The Bad News Outweighs the Good News

Will Lucid Group’s pricing strategy work wonders this year? The company’s disappointing fourth-quarter 2023 revenue and 2024 vehicle-production guidance don’t bode well for Lucid. It looks like the automaker needs a miracle.

Frankly, Lucid Group’s slight quarterly EPS beat isn’t enough positive news to outweigh the negative news. LCID stock has disappointed investors for a long time. Instead of hoping for a turnaround, feel free to bail on Lucid Group and steer clear this year.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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