Lucid’s (LCID) shares tumbled more than 8% in premarket trading Thursday after the company posted worse-than-expected FQ4 earnings and issued a disappointing delivery guidance for fiscal 2024.
The company reported a loss per share of $0.29, slightly better than the analyst predictions of a $0.30 loss. However, its quarterly revenue of $157.2 million did not meet the expected $178.33 million consensus estimate.
Looking ahead to 2024, Lucid (NASDAQ:LCID) has set its annual production target of 9,000 vehicles, significantly below the average projection of 23,000 vehicles.
Evercore sees 20% downside risk in LCID stock
Commenting on Lucid’s report and outlook, Evercore ISI analysts said the company’s “stock story remains extremely difficult as it is hard to point to any solid catalyst” for it to overcome a myriad of challenges it is currently facing.
Waning consumer demand and “the fog of EV price/demand wars” amidst high interest rates, coupled with disappointing delivery guidance, are likely to “continue to leave the stock gasping for “Air”,” wrote Evercore ISI analysts.
The broker set a price target on the stock of $3, implying a downside risk of nearly 20% from the latest closing price.
Cantor Fitzgerald downgrades LCID to UW
In response to LCID’s poor guidance for this year, Cantor Fitzgerald analysts cut their rating on the stock from Neutral to Underweight on Thursday, citing “high negative gross margins, lower-than-expected annual production guidance, and lower customer demand.”
The investment firm also reduced its price target on the stock from $6 to $4.
For the fourth quarter of 2023 and the full fiscal year, the company reported gross margins of roughly -161% and -225%, respectively, aligning with the broker’s predictions of -159% and -220%.
But despite these figures, Cantor Fitzgerald’s conservative outlook does not anticipate LCID achieving positive gross margins until Q4 2024 “at the earliest,” analysts said.
On a brighter note, the investment firm maintains an optimistic perspective regarding the unveiling of the Gravity, and believes it will enable Lucid to target the SUV market competitively in terms of pricing.
The recently unveiled Gravity is expected to receive a positive reception from customers, analysts noted, although the start of production (SOP) is not forecasted until the fourth quarter of 2024, with deliveries commencing in 2025.
“However, while we believe LCID's vehicles are amongst the best in the industry, we are becoming more conservative in the short term given a disappointing FY24 production guidance, persistently high negative gross margins, lower-than-anticipated demand, and slower deliveries to Saudi Arabia than initially expected,” Cantor Fitzgerald analysts wrote.