Luxury EV maker Lucid Group is facing a challenging quarter with a 38.9% year-over-year decline in revenue and a loss of $654 million. The company is forecasting a production of around 9,000 vehicles in 2024, but is struggling with demand rather than supply. The company plans to introduce a lower-cost midsized vehicle in 2026, and has recently reduced the price of the Lucid Air Pure in an effort to boost demand.
Analysts like Ben Kallo from Baird have a balanced view of Lucid’s prospects, recognizing the company’s technology while also acknowledging the challenges ahead. While Kallo remains on the sidelines with a neutral rating for the stock, he believes that Lucid’s recent price cuts and plans for a lower-cost midsized vehicle could potentially stimulate demand. Ultimately, analysts are divided in their opinions, as evident by the Hold consensus rating, but many believe that the shares are somewhat undervalued.
Despite the difficult year ahead and the challenges of the current EV market, there is still potential upside for Lucid Group. With a price target lowered to $4, there is a potential upside of ~31% from current levels, and analysts believe the stocks are somewhat undervalued, projecting a 47% premium in 12 months’ time. Regardless, it is important for investors to conduct their own analysis before making any investment decisions.
