This content material has been produced by Opto and was initially printed on the Opto Blog.
Electrical car maker Lucid Motors [LCID] reported a 630% surge in year-over-year revenues and a 94% hike in earnings per share when it reported its fourth-quarter outcomes on 28 February.
The group reported revenues for the interval of $26.39m, up from $3.63m within the year-ago quarter, and an earnings lack of $0.64 per share.
It stated that $21.3m of its complete income was attributable to preliminary deliveries of its Lucid Air Dream Version, which started in October. It’s a luxurious car out there in two ranges, each with a prime velocity of 168mph.
Lucid stated it delivered 125 vehicles to clients within the fourth quarter, with complete manufacturing exceeding 400 automobiles so far and over 300 deliveries to clients. Lucid stated it has additionally acquired over 25,000 buyer reservations, reflecting potential gross sales of greater than $2.4bn.
Nevertheless, regardless of this enhance, revenues missed analyst expectations of $36.74m and earnings have been wanting forecasts of $0.35. Because of this, the Lucid inventory value has fallen 15.2% because the announcement. It now stands at $24.58 on the shut on 2 March, after hitting a excessive of round $55 in mid-November.LCID Chart by TradingView
Lucid misses manufacturing targets
One other blow to the Lucid inventory after the This autumn announcement was its revelation that it will produce between 12,000 and 14,000 Lucid Air automobiles in 2022, down from the 20,000 items it promised in its Q3 earnings.
“This displays the extraordinary provide chain and logistics challenges we’ve encountered and our unrelenting concentrate on delivering the best high quality merchandise. We stay assured in our capability to seize the large alternatives forward given our know-how management and powerful demand for our vehicles,” stated Lucid’s CEO Peter Rawlinson.
The corporate additionally revealed that it’s going to delay its electrical SUV Gravity to the primary half of 2024 from 2023. Rawlinson stated the delay was wanted to refine the product and supply further time to implement greatest practices from the launch of the Dream version.
Some analysts stay bullish
In a be aware despatched to Opto, Redburn analyst Charles Coldicott stated Lucid’s provide chain squeezes have been primarily impacting carpet and glass. He warned that the ramping down of manufacturing is perhaps even greater than administration expects.
Referring to the 12,000–14,000 goal, Coldicott wrote: “Our evaluation would recommend that even this determine seems bold. Guided by the week-by-week ramp up of different EV factories, we conclude that Lucid might solely be capable to produce 10k items this 12 months now.”
In line with Coldicott, Lucid is already “considerably behind” the development seen by rival Tesla [TSLA] with its first car, the Mannequin S.
“There are 40 weeks left in 2022 and Lucid has simply reached 400 items of complete manufacturing,” he stated, although he identified that Lucid is “working in a way more hostile provide surroundings than Tesla skilled in 2012.”
Coldicott additionally famous that Lucid’s close to 50% enhance in its order e book since mid-November confirmed the tempo of consumption was declining. He stated that it has gone from round 610 items per week in October and November to 540 per week since. As compared, Mercedes gained 3,600 orders in January, representing roughly 820 items per week, Coldicott wrote, although in his view “manufacturing and never demand is Lucid’s largest downside for now”.
Financial institution of America analyst John Murphy stated the manufacturing change was “considerably stunning in magnitude” regardless of Lucid anticipating a lower, as reported by the Teslarati web site. Nevertheless, he maintained a ‘purchase’ score and a $60 value goal on the inventory.
Different analysts additionally stay bullish, with analysts polled by MarketScreener giving Lucid a consensus ‘outperform’ score and a $41.25 value goal.
Indicators of optimistic momentum
Murphy’s confidence relies on the group’s sturdy financials, with $6.2bn in money on its steadiness sheet and a wholesome order e book.
The BoA analyst additionally highlighted Lucid’s announcement alongside the outcomes that it’s planning to construct a brand new manufacturing facility in Saudi Arabia. The corporate estimates that it’s going to ship as much as $3.4bn in worth to Lucid over 15 years.
As well as, Lucid stated that the two.85 million sq. foot growth of its Casa Grande manufacturing facility in Arizona was additionally on observe.
The demand wanted to justify this manufacturing ramp-up appears clear. Lucid will proceed to be buoyed by the final market shift in direction of electrical automobiles and infrastructure as governments search to satisfy net-zero emissions targets.
But, there may be big competitors within the market, significantly within the type of Tesla. However Edward Sheldon, writing in The Motley Idiot, sees hope in Lucid’s revolutionary designs.
“Lucid has some very nice EVs (its Air mannequin gained the 2022 MotorTrend Automotive of the Yr award) that would doubtlessly assist the corporate seize market share from Tesla,” he stated.
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