RIVN - Lucid Q1 Preview: Business Model Doesn't Look Sustainable

2024-04-30 17:55:52 ET

Summary

• Lucid Group faces challenges including cash burn, high valuation, and operational struggles, making it a sell.
• The company's stock price has declined significantly, reflecting operational challenges and inventory surplus.
• Q1 expectations show improvement in losses and revenue, but balance sheet concerns and reliance on equity funding pose risks.

Investment Thesis

Going into this earnings report, Lucid Group (LCID) faces significant challenges that, I believe, make it a sell. Despite some progress in managing their inventory and likely growing revenue this quarter, the company continues to burn through cash at an alarming rate, with expected losses to exceed $1.1 billion for the year....

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