Lucid Stock Ahead of Q4 Earnings: To Buy or Not to Buy?

Lucid Group LCID is slated to release fourth-quarter 2024 results on Feb. 25, after market close. The Zacks Consensus Estimate for the to-be-reported quarter is pegged at a loss of 26 cents a share on revenues of $225.5 million. Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The loss per share estimate for the fourth quarter of 2024 has remained unchanged over the past 90 days. The bottom-line projection indicates a year-over-year improvement of 10.3%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 43.5%. Image Source: Zacks Investment ResearchFor 2025, the Zacks Consensus Estimate for LCID’s revenues is pegged at $1.34 billion, implying a rise of 67.4% year over year. The consensus mark for the 2025 bottom line is pegged at a loss of 90 cents per share, indicating an improvement from a loss of $1.25 per share projected for 2024.In the trailing four quarters, this California-based electric vehicle (EV) startup missed EPS estimates on all occasions, with the average negative earnings surprise being 14.8%.Lucid Group, Inc. Price and EPS Surprise Lucid Group, Inc. price-eps-surprise | Lucid Group, Inc. QuoteQ4 Earnings Whispers for LCIDOur proven model does not conclusively predict an earnings beat for Lucid this earnings season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.LCID has an Earnings ESP of +3.85% and a Zacks Rank #4 (Sell).You can see the complete list of today’s Zacks #1 Rank stocks here.Factors Shaping Lucid’s Q4 ResultsLucid sold 3,099 vehicles in the December quarter, a record for the company. Deliveries rose 79% on a yearly basis and 11.4% on a sequential basis. A boost in deliveries is likely to drive revenues in the to-be-reported quarter. Production in the fourth quarter of 2024 came in at 3,386 units, up from 1,805 units in the third quarter of 2024 and 2,391 units in the fourth quarter of 2023.On the flip side, Lucid is spending heavily on research and development expenses. R&D expenses flared up 40.5% in the third quarter of 2024. In the first nine months of 2024, R&D expenses totaled $896 million, up from $694 million in the corresponding period of 2023. Selling, general and operating expenses have also been rising. Lucid’s operating expenses significantly exceed its revenues and the trend is expected to have continued, limiting the company’s bottom line in the to-be-reported quarter as well.LCID Stock Price Performance & ValuationOver the past six months, shares of Lucid have risen more than 7%, underperforming the industry, sector and the S&P 500 index. Its close competitor Rivian RIVN has seen its stock price rise roughly 9% in the same timeframe.6-Month Price PerformanceImage Source: Zacks Investment ResearchLCID is currently trading at a forward sales multiple of 6.5X. In comparison, Rivian is trading at a forward sales multiple of 2.65X.Image Source: Zacks Investment ResearchHow Should You Play Lucid Before Q4 Results?Lucid made progress in 2024, achieving its production targets and delivering a record number of vehicles. The company is expanding its lineup beyond the Lucid Air with the Gravity SUV. Gravity Grand Touring, priced at C$134,500, is available for order, while Gravity Touring, starting at C$113,500, is expected in late 2025. These new models could help drive future growth.Lucid benefits from strong financial backing from the Public Investment Fund (PIF) of Saudi Arabia, which has invested $8.9 billion since 2018. Subsequent to the third quarter of 2024, LCID raised $1.75 billion in capital, which further bolsters its cash reserves, extending its financial runway into 2026. However, these capital raises have resulted in significant shareholder dilution, which remains a key risk.The company also faces major challenges in scaling production while maintaining its luxury EV positioning. The high-end EV market is highly competitive, with both established automakers and new entrants increasing pressure. Additionally, Lucid’s cash burn remains high. Its reliance on equity raises a red flag.Political and macroeconomic uncertainties also add to the concerns. A potential shift in U.S. EV policies under the Trump administration could impact demand. Moreover, looming tariffs could disrupt supply chains and increase costs.While Lucid has taken steps to control costs, substantial external funding is still required. Investors should watch for improvements in production efficiency, deliveries and financial performance before investing in the stock. Until there is clear progress, investment in LCID stock should be avoided.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lucid Group, Inc. (LCID): Free Stock Analysis Report Rivian Automotive, Inc. (RIVN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks