On Thursday, BofA Securities maintained its Impartial score on Lucid Group Inc. (NASDAQ:) with a gentle worth goal of $3.40. The funding agency acknowledged Lucid as one of many extra promising corporations amongst startup electrical car (EV) producers. In response to BofA Securities, Lucid is forward of many rivals because of its complete technique and skilled administration workforce.
The analyst at BofA Securities highlighted Lucid’s sturdy place within the EV market, noting the corporate has extra operational elements in place in comparison with its friends. The administration workforce’s vital expertise was additionally seen as a key benefit for Lucid. Regardless of these strengths, BofA Securities projected that Lucid won’t attain breakeven on an working and money move foundation till 2027 or later.
The projection of a delayed breakeven level relies on the expectation that Lucid would require substantial capital infusion within the coming years. This anticipated want for vital fundraising efforts is an element within the agency’s resolution to reaffirm the Impartial score on Lucid’s inventory.
BofA Securities’ evaluation displays warning over Lucid’s monetary path to profitability. The analyst’s feedback recommend that whereas Lucid is well-positioned within the EV market, the street to monetary stability could also be longer and require extra capital than beforehand anticipated. The worth goal of $3.40 stays unchanged, indicating the agency’s constant view on Lucid’s inventory worth.
In different latest information, Lucid Group has reported preliminary monetary outcomes for the third quarter, with an estimated income of roughly $200 million and an working loss starting from $765 million to $790 million. This contrasts with consensus estimates that projected a income of $191 million and an working lack of $719 million. The electrical car producer has additionally introduced a public providing of 262.4 million shares and a non-public placement settlement with Ayar Third Funding, its largest shareholder. This transfer is predicted to lift roughly $1.67 billion for basic company bills, capital expenditures, and dealing capital.
Lucid additionally disclosed a partnership with 4 Seasons Motels and Resorts to offer sustainable driving experiences for resort company by way of the set up of electrical car charging stations at chosen 4 Seasons properties. By way of product improvement, Lucid is specializing in the manufacturing of its Gravity SUV, anticipated to launch later this yr.
InvestingPro Insights
Latest knowledge from InvestingPro sheds further mild on Lucid Group’s monetary scenario, complementing BofA Securities’ evaluation. As of the final twelve months ending Q2 2024, Lucid reported income of $668.29 million, with a regarding income progress decline of 11.31%. This aligns with the challenges highlighted within the article relating to the corporate’s path to profitability.
InvestingPro Ideas reveal that Lucid is “shortly burning by way of money” and “suffers from weak gross revenue margins,” which helps BofA Securities’ projection of a delayed breakeven level. The corporate’s gross revenue margin stands at a stark -162.6%, underscoring the monetary hurdles Lucid faces in its journey to profitability.
On a extra optimistic notice, Lucid “holds more money than debt on its steadiness sheet,” which might present some flexibility as the corporate navigates its capital wants. This money place could also be essential given BofA Securities’ expectation of considerable capital infusion necessities within the coming years.
For buyers searching for a extra complete evaluation, InvestingPro provides 11 further suggestions for Lucid Group, offering a deeper understanding of the corporate’s monetary well being and market place.
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