On Friday, Cantor Fitzgerald adjusted its outlook on Lucid Group Inc. (NASDAQ:LCID), reducing the price target to $3.00 from the previous $4.00, while keeping a Neutral rating on the stock. This change follows the recent announcement by Lucid Group that its new Gravity SUV is now open for customer pre-orders. The Gravity SUV is a seven-seater electric vehicle boasting a battery range of over 440 miles.
Lucid Group revealed on Monday (NASDAQ:MNDY) that the Gravity SUV is expected to significantly broaden its customer base, as the total addressable market (TAM) for the SUV is approximately six times larger than that of the Lucid Air sedan. The company anticipates the commencement of production for the Lucid Gravity Grand Touring model in the fourth quarter of 2024, with deliveries projected to start in the following fiscal year.
The starting price for the Lucid Gravity SUV has been set at $94,900. The company expects a more substantial increase in production volume during the second half of 2025 and into 2026. As of the third quarter of 2024, Lucid Group has expanded its network to 55 studios and service centers, with 42 located across North America, 9 in Europe, and 4 in the Middle East.
Cantor Fitzgerald's revised price target reflects a decrease in anticipated average selling prices and an increase in share count, considering recent equity raises by Lucid Group. Despite the lowered price target, the firm's stance on Lucid Group's stock remains unchanged at Neutral.
In other recent news, Lucid Group, Inc. reported robust third-quarter results, with revenues reaching $200 million, outperforming analyst projections of $196.47 million. The electric vehicle manufacturer delivered 2,781 vehicles during this period, marking a 90.9% increase compared to the same timeframe last year. The company's adjusted loss per share was $0.28, a narrower figure than the anticipated $0.31 loss.
Lucid Group's production numbers also showed promise, with 1,805 vehicles manufactured in Q3 and a projection of approximately 9,000 vehicles by 2024. The company's liquidity position remains strong, concluding the quarter with $5.16 billion in total liquidity, following a recent capital raise of approximately $1.75 billion in October.
Despite still registering losses, Lucid Group highlighted improvements in gross margins, attributing them to successful cost reduction efforts. In another development, the company has opened orders for its new Gravity SUV, set to begin production later this year.
InvestingPro Insights
Recent InvestingPro data provides additional context to Lucid Group's financial situation and market performance. As of the last twelve months ending Q2 2024, Lucid reported revenue of $668.29 million, with a concerning revenue growth decline of 11.31%. This aligns with Cantor Fitzgerald's cautious outlook and reduced price target.
InvestingPro Tips highlight some critical aspects of Lucid's current position. The company holds more cash than debt on its balance sheet, which could provide some financial flexibility as it ramps up production of the new Gravity SUV. However, Lucid is quickly burning through cash, a concern given the capital-intensive nature of electric vehicle production and the planned expansion of its product line.
The stock's recent performance has been challenging, with InvestingPro data showing a 35.47% decline in the past month and a 29.52% drop over the last three months. This downward trend supports Cantor Fitzgerald's decision to lower the price target.
For investors considering Lucid's potential, InvestingPro offers 13 additional tips that could provide deeper insights into the company's prospects. These tips, along with real-time metrics, can help in forming a more comprehensive view of Lucid's investment potential as it navigates the competitive EV market.
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