Lucid Group stock price has bounced back and surged to its highest point since February 25. LCID soared by almost 50% from its lowest level this year, mirroring the performance of other companies like Tesla and Rivian Automotive. This article explores the recent earnings and whether this is a good time to buy the stock.
Why Lucid Group stock price has jumped
Lucid Group share price has rallied in the past few weeks as investors reacted to the recent earnings, which showed that the company’s business was doing well in a difficult environment.
The numbers revealed that Lucid delivered 3,109 vehicles in the first quarter, up by 58% from the same period last year. This happened as the company produced 2,212 vehicles in the quarter, including 600 that were in transit to Saudi Arabia.
Most importantly, the company grew its gross margin during the quarter to minus 97% from minus 134% in the same quarter a year earlier. This margin, however, was worse than minus 89%, which it had in the fourth quarter of last year.
Lucid Group EBITDA, a closely-watched figure, also improved to minus $563 million during the quarter.
Therefore, analysts anticipate that LCID’s business will continue improving in the next few years as it works towards profitability.
For example, the average revenue estimate from Wall Street investors is that its second-quarter revenue will be $288 million. They also expect that the earnings per share (EPS) will be a 22-cent loss, an improvement from the 31-cent loss in Q2’24.
Analysts are also optmistic that the annual revenue this year will also be strong. The average estimate is that the annual revenue will grow by 72% to $1.4 billion, followed by 95% growth in 2026. This growth will be because the management expects to ramp up production from 9,000 in 2024 to 20,000.
Lucid Group’s annual loss per share is expected to improve from $1.25 last year to 83 cents this year and 64 cents next year. As such, while Lucid Group’s cash incineration will continue, analysts expect the business to move in the right direction in the coming years.
Lucid Gravity sales
The other reason why the Lucid stock price surged is the ongoing Gravity vehicle sales. Recent data shows that the SUV is starting to gain traction as the delivery started in December last year.
Gravity is a sports utility vehicle starting at $79,900, with the Touring version costing over $100,000. The company hopes that it will be the best electric SUV in the US as it competes with products made by companies like Rivian, Hyundai, Tesla, and General Motors.
Lucid’s Gravity vehicle is a more premium vehicle than its competitors, meaning that it will mostly attract wealthy shoppers and executives.
Lucid Group share price technical analysis
The daily chart shows that the LCID share price bottomed at $2, a level it has failed to move below since November last year.
It is now attempting to move above the descending trendline that connects the highest swing since September 2023. Top oscillators like the Relative Strength Index (RSI) and the MACD have risen and are pointing upwards.
Therefore, the Lucid stock price will likely have a bullish breakout, with the next level to watch being at $4.38, the highest swing on August 27, which is about 49% above the current level. A drop below the support at $2 will invalidate the bullish Lucid Group stock forecast,
Read more: Lucid Group stock forecast ahead of earnings: buy, sell, or hold?
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