TLDR
- Lucid Group (LCID) stock rose 12% through 10 a.m. ET Tuesday, its third straight gain, and traded at $3.89 by 11:23 a.m. ET.
- Q3 loss was $2.30 per share versus a $2.27 consensus, on $350 million in revenue versus about $396 million expected.
- Cash burn fell 30% from the prior quarter, and cash ended Q3 above $930 million.
- Lucid burned more than $1 billion last quarter and nearly $4 billion year to date.
- MarketBeat lists an average analyst rating of “Reduce” and a consensus target of $8.67.
Lucid Group (LCID) stock climbed 12% through 10 a.m. ET on Tuesday, its third straight day of gains. By 11:23 a.m. ET it traded at $3.89, up 8.06% on the day.
The rally followed a third-quarter miss. The loss came in at $2.30 per share, wider than the $2.27 analysts expected.
Revenue was $350 million, short of the roughly $396 million forecast. Production fell 24% after Lucid cut a factory shift, and deliveries also came in below expectations.
The stock moved between $3.55 and $4.20 on Tuesday. Volume hit 15.1 million, above the 11.1 million average.
Monday was a green day too. The stock rose 9.4% to $3.60 from a $3.29 close, on volume 39% above average.
Why Traders Looked Past the Miss
Cash burn fell 30% from the prior quarter. That seems to be what caught the market’s eye.
CEO Silvio Napoli said the turnaround “is beginning to show progress.” He added that Lucid is taking “decisive actions to align our manufacturing capacity with demand, reduce inventory and lower operating expenses.”
Lucid also lined up $1.75 billion in new funding. MarketBeat describes it as a bigger loan from Saudi Arabia’s Public Investment Fund, the largest holder, while Motley Fool describes it as a stock sale.
Lucid ended the quarter with cash above $930 million. Total liquidity, which includes borrowing room, sits near $2 billion.
The Runway Math
Lucid still burned more than $1 billion in cash last quarter. Year to date, the burn is nearly $4 billion.
At that pace, cash on hand lasts a bit less than one more quarter. Counting borrowing room, Motley Fool’s Rich Smith figures the lights could stay on for about two quarters.
Smith is not a fan of the rally. He wrote that he “wouldn’t touch this stock with a proverbial 10-foot pole.”
The stock trades well below its longer-term trend. Its 50-day moving average is $3.86, while the 200-day is $6.73.
The 52-week range runs from $2.37 to $17.40. The stock is down about 79% over the past year, and it fell 25% in October.
Wall Street remains cautious. MarketBeat counts one Buy, nine Hold and three Sell ratings, with an average rating of “Reduce” and a $8.67 consensus target.
Recent target cuts came from Royal Bank of Canada, from $7 to $4, and Morgan Stanley, from $5 to $3 with an underweight rating. Citigroup trimmed its target from $14 to $11 and kept a Buy.
Lucid’s market cap is about $1.42 billion. Institutions own 75.17% of the stock.
At 11:23 a.m. ET Tuesday, Lucid traded at $3.89, just above its 50-day average.
