To The Moon

$Lucid Group Inc(LCID)$ will be reporting its third quarter earnings result on 07 Nov 2024 after the market close.

Investors are worried that the incoming Trump administration will cancel government-supported EV rebates and tax incentives.

The consensus EPS forecast is for a loss of 31 cents for this third quarter despite deliveries number exceed the same period one year ago.

EV Deliveries For Third Quarter Reasonable

Electric vehicle (EV) maker Lucid Group LCID set a new record for vehicle deliveries in the third quarter of 2024. It delivered 2,781 vehicles in the September quarter, marking the third consecutive quarter of record deliveries.

This brings LCID’s total deliveries so far this year to 7,142, surpassing the 6,001 units delivered in 2023. Hefty discounts are making the vehicles more affordable and driving Lucid’s deliveries. For instance, LCID is offering up to $17,500 in savings on the 2024 Air Grand Touring and making Air Pure more accessible with leases under $550 per month.

Cash Flow Support A Concern For Long Term

Finally, the company is backed by Saudi Arabia’s Public Investment Fund (PIF), its largest shareholder, which holds over 60% of Lucid’s outstanding shares. It has provided critical financial support to LCID to run its operations and invest in new EV offerings.

The company exited the second quarter of 2024 with $4.3 billion in total liquidity and received another $1.5 billion funding commitment from a PIF affiliate in August 2024. The company anticipates the cash to support its operations until at least the fourth quarter of 2025.

But if Lucid continue to produce but can they sell at a profit if not, this cash flow would run out very fast and this might hamper the growth for 2025.

Lucid Stock Price Lost More Than 45% Year To Date

The stock price decline reflects investor concerns and uncertainty surrounding Lucid's financial performance and potential guidance updates. The electric vehicle industry has faced numerous challenges this year, including supply chain disruptions, rising material costs, and mounting competition from established automakers.

Lucid investors have lost more than 45% of the stock price and with the third quarter deliveries surpass the previous year, but will this translate to better revenue and earnings?

Can Lucid Meet Its 2024 Production Target Of 9000 Vehicles?

The EV market has hit a speed bump, with companies like Lucid and Tesla slashing prices to stimulate demand. While hybrid vehicles are gaining traction due to their affordability and lower interest rates, luxury EV makers are trying to make their offerings more tempting through price reductions and financing deals. Lucid's recent success in exceeding delivery expectations showcases that strategic pricing adjustments can effectively attract consumers and could potentially revitalize the EV market.

Lucid's efforts show how the luxury EV market is adapting. Despite economic uncertainties, the company is optimistic, projecting to produce 9,000 cars in 2024, up from last year's 8,428. This indicates confidence in continued demand growth. The broader trend among EV manufacturers suggests a necessary recalibration to attract price-sensitive consumers and maintain competitiveness against hybrids. Ultimately, these shifts could signal a more accessible future for luxury electric vehicles.

Technical Analysis - MACD and Multi-timeframe (MTF)

If we looked at how LCID have been trading, we can see that it is trading way below the short-term and long-term MA, and it is quite difficult for LCID to come back, unless there is a huge surprise of LCID turning profitable.

From MACD, there is a potential bullish crossover forming, but we need a strong stock price surge for that to happen, and MTF has given a weak downside.

Summary

For EV makers, cash flow and liquidity is important to keep the company going and Lucid being a luxury EV maker, it is even more important, and their cash flow is not generated from the sales of their vehicles but from investment.

This is a concern, but I would still be monitoring this stock for opportunity to make a quick trade if there is any sign of upside from price action for short term.

Appreciate if you could share your thoughts in the comment section whether you think Lucid can better its EPS with more deliveries translate to more sales profit.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.