2023-11-06 13:10:32 ET
Lucid ( NASDAQ: LCID ) is set to report its third-quarter earnings on Tuesday and investors will watch out for the luxury electric-vehicle startup’s cash position, while accessing its ability to stick to production target for the year.
Wall Street expects the California-based company to post loss per share of $0.40, while revenue is expected to be $195.2 million.
EV startups have been facing constant pressure due to intensifying competition and the ongoing price war started by larger rival Tesla ( TSLA ) amid rising interest rates and falling consumer demand. Analysts say that this move might escalate margin pressure for cash-crunched startups like Lucid going forward.
Earlier this week, Lucid lowered the price of its Air luxury sedans for a limited time ahead of the upcoming holiday season. Prior to this, the company lowered prices of its Air sedan models, owing to lacklustre demand.
According to an analysis by Seeking Alpha contributor The Asian Investor the announcement of a low-price Lucid Air version this early in the production cycle comes with a number of problems that “could signify future margin problems” and also “raises questions about Lucid Air's revenue potential.”
Lucid had cash and cash equivalents of $2.78 billion as of June 30 versus $900 million in the first quarter.
Invertors also dumped its shares when the company in October said it produced 1,550 vehicles in the third-quarter, compared to 2,173 vehicles in the previous quarter, while deliveries for the quarter rose less than 4% sequentially. It said it had another 700 vehicles in transit to Saudi Arabia for final assembly.
“It is never a good sign when a company widely expected to deliver stellar production growth disappoints the investor base with its sales and delivery numbers, but this is what happened to Lucid Motors in 2023,” pointed out another Seeking Alpha analysis.
Lucid has a production target of 10,000 vehicles for 2023, which it reaffirmed in August, implying that the company needs to produce about 4,000 vehicles in the fourth quarter to meet that target.
Over the last three months, EPS and revenue estimates have seen no upward revisions compared to five downward revisions.
Seeking Alpha and Wall Steet rated the stock a “hold”, while Seeking Alpha’s Quant rating considers it a “sell”. The stock has lost nearly 28% so far this year.
Earlier in October, Tesla fell slightly short with its third-quarter revenue and EPS tallies but said it still expects full-year deliveries of 1.8M vehicles.
More on Lucid
- Why Lucid Is Not The Next Tesla (Rating Downgrade)
- Lucid: The Problem With Launching A Lower-Cost Lucid Air Version
- Lucid Motors: Penny Stock Fears Are Real (Downgrade)
- Lucid Group cuts Air sedan prices for limited time ahead of holidays
For further details see:
Lucid's cash reserve, production target in focus during Q3 results