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Lucid Group (NASDAQ:LCID), the retailer of Lucid Air electric sedan, has now revealed its first quarterly earnings as a public company. Bear in mind that Lucid was still a pre-revenue company in Q3 2021, with deliveries of the Air sedan only commencing in late October.
Lucid Group’s Earnings for the Third Quarter of 2021
For the three months that ended on the 30th of September 2021, Lucid Group has disclosed $232,000 in revenue against consensus expectations of $1.25 million.
(All figures are in millions of dollars)
Lucid Group has reported that reservations for the Air EV have now increased to beyond 17,000. Bear in mind that the company had reported over 13,000 reservations just last month. Readers should note that Lucid Group expects to deliver a little over 500 vehicles before the end of 2021.
Moreover, the company currently has a cash balance of $4.8 billion. Lucid Group has reported an EPS of -$0.43 against consensus expectations of -$0.25.
(All figures are in dollars)
Other business highlights include:
The market has reacted positively to Lucid Group's first earnings release as a public company, with the stock posting gains of around 7 percent in after-hours trading.
Q3 2021 Earnings Context
As per the latest tally, Lucid Group has around 13,000 confirmed reservations for the Air EV. The company plans to manufacture 520 units in 2021, ramping up its production cadence to 20K units in 2022 and 49K units in 2023. Crucially, 2023 would also see the launch of the Lucid Gravity SUV. Moreover, overseas shipments are likely to commence next year.
Moreover, MotorTrend has now declared Lucid Group’s Air EV as its car of the year for 2022. The publication noted:
“Were we wowed by the whopping numbers Lucid has been touting recently—up to 1,111 horsepower and 1,390 lb-ft of torque in the Air Dream P edition and up to 520 miles of EPA-official range in the Dream R edition? No. Anyone can buy big numbers by installing giant motors and batteries. Rather, it's the sophisticated way Lucid achieves them in a package that ranks highly in each of our six key criteria that captured our attention and our calipers.”
In another positive development, news came out today that the Saudi PIF still retained its investment of $1 billion in Lucid Group. This is an indication of continued confidence in the company’s ability to deliver on its hyped promises.
— TradeTheNews.com (@Trade_The_News) November 15, 2021
Finally, Bank of America (BofA) currently retains the highest price target for Lucid Group shares, pegging its benchmark at $60 per share along with a ‘Buy’ rating. BofA analyst John Murphy noted in an investment note last week:
"Our $60 PO for LCID is now based on ~8.5x EV/Sales (prior ~3x) and ~104x EV/EBITDA (prior ~37x) on our 2025 estimates (now using a forward Balance Sheet), implying ~1x EV/Sales and ~6.5x EV/EBITDA on Pro-forma capital-induced 2030 estimates."
Back in September, BofA had dubbed Lucid Group a “Tesla/Ferrari of new EV automakers” and “one of the most legitimate start-up EV automakers.” Currently, Bank of America is joined by Citi and CFRA Research in maintaining an overall ‘Buy’ rating on Lucid Group shares.
Lucid Group's Earnings Call for Q3 2021
- Lucid Group is looking to enter the EU and Middle East markets in 2022
- Lucid Gravity SUV is slated to enter into production in 2023
- The revenue of $232,000 only relates to battery packs for racing cars
- Costs increased ahead of production ramp-up in October 2021
- The company remains committed to deliver 20,000 units in 2022 but supply chain risks remain
- The company plans to expand its production capacity to 500,000 units by the “end of the decade”
- Casa Grande facility’s production capacity will max out at 365,000 units, with the residual 2030 capacity coming from other facilities around the globe
- Rawlinson believes that Gravity would be as “disruptive” for the SUVs as the Air EV is for sedans
- The bulk of the reservations are in the US, with Saudi Arabia coming in second
- Rawlinson termed Saudi response to the Air EV as “heartening”
- Rawlinson believes that the consumer journey is too precious to delegate to a third-party and, therefore, the company would not go toward the franchise/dealership model
- By mid-decade, Lucid Group expects its gross margin to reach “competitive level”
- The Lucid Air Pure would be able to contribute to the company’s bottom-line by undergoing component cost reductions amid a general production ramp-up
- Lucid Air Pure deliveries would commence in the “latter half of next year”