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Lucid Group’s Outlook: Time to Adjust Your Portfolio?

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Written by Timothy Sykes Reviewed by Bryce Tuohey Fact-checked by Matt Monaco
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Lucid Group Inc.’s stock momentum is heavily influenced by recent news surrounding supply chain constraints and production challenges, leading to investor caution and contributing to a downturn. On Thursday, Lucid Group Inc.’s stocks have been trading down by -5.56 percent.

Key Developments Impacting Lucid Group Stock

  • Concerns Over Pricing: TD Cowen flags potential hurdles for Lucid Group, initiating coverage with a Hold rating and a $2.30 price target due to worries about the high starting cost of Lucid Gravity limiting volume growth.

Candlestick Chart

Live Update At 14:32:30 EST: On Thursday, March 13, 2025 Lucid Group Inc. stock [NASDAQ: LCID] is trending down by -5.56%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • Proposed Tax on Electric Vehicles: Senate Republicans have put forward a proposal for a $1,000 tax on such purchases that could pose a significant financial challenge for the Company.

  • Analysts Downgrade Stock Ratings: Lucid Group’s stock has been downgraded by Redburn Atlantic to ‘Sell’ from ‘Neutral.’ This downgrade follows skepticism surrounding the firm’s capacity to leverage economies of scale effectively.

  • Leadership Shakeup Unsettled Waters: The business navigates a storm with te crashing exit of its founder and chief technical officer, Peter Rawlinson. His departure, coupled with BofA’s downgrade decision from Neutral to Underperform with a $1 per share target, has left investors reeling.

Overview of Lucid’s Recent Financial Landscape

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More Breaking News

In the latest earnings report for the fourth quarter of 2024, Lucid Group experienced both highs and lows. Revenue hit $807.83 million, aligning with market expectations. Yet, this was overshadowed by concerning numbers elsewhere. The operating income plummeted, revealing a sharp drop of -732.95M. While expenses skyrocketed to $967.42M, showing the uphill battle the company faces in aligning revenue with outlays. Investors worry as the company reported a nearly $400M net loss for the quarter ending Dec 31, 2024.

Uncovering Market Reactions

TD Cowen’s evaluation, the new price target of $2.30 for Lucid’s shares, throws a spotlight on the company’s prospects. They caution that the high starting price of Lucid’s Gravity model might lead to difficulties in scaling up production volumes.

Regulations on the Horizon: The potential new $1,000 tax proposed by Senate Republicans on fresh electric cars makes the sector jittery as downstream impacts are debated. It might increase costs for buyers sometime in Feb 12, 2025, complicating a potential price war amidst EV makers.

Financial Analysts’ Skepticism:* In late Feb 2025, Redburn Atlantic and BofA revised their ratings for LCID, each citing hesitations regarding the automaker’s financial sustainability. Notably, BofA shifted Lucid’s rating to ‘Underperform’ and drastically cut the price target from $3.50 to $1.13 per share.

*Leadership Departures Stir Confidence Issues: Important spectacles followed after the company confirmed the departure of its noted founder, CEO Peter Rawlinson, compounding pressures on its stock value and further straining stakeholder confidence.

Earnings Snapshot and Key Insights

Lucid Group’s recent earnings report stirs mixed feelings. For Q1 of 2024, the company posted a revenue of $807.8M, aligned with expectations, closing at $2.035 on Mar 13, 2025. However, financial markers such as a negative EBIT margin of -335.2, and EBITDa margin slumped to -290.7, do raise red flags regarding its operational profitability.

The road ahead for Lucid looks challenging especially with the net income reflecting a deficit of -$636.9M and net earnings per share at -$0.22. The price-to-sales ratio of 8.11 and a significant drop in income from continuing operations such as -397.22M could be signaling a cause for reevaluation from the stakeholder’s perspective. While the company strives to market its products, it’s shadowed by leadership transitions and pricing challenges in the competitive EV arena.

Analysts’ Verdict on Lucid Group Inc: Course to Navigate

With financial experts echoing concerns over Lucid Group’s pricing strategy and leadership departures, the stock’s decrease in value comes as no surprise. The decision to downgrade by key financial firms emphasizes potential financial strain caused by a higher cost structure requiring greater sales volume.

At Bank of America, Lucid Group was shifted from ‘Neutral’ to ‘Underperform,’ reflecting these anticipated challenges. This followed a similar re-evaluation from Redburn Atlantic, highlighting the wider uncertainty surrounding the company’s market positioning. The rapid employee changes following Peter Rawlinson’s departure only fueled investor concerns, weakening market confidence further.

Market Challenges & Strategic Implications

Lucid Group stands at a critical crossroads. The concern has grown about its high price model restricting its growth, as outlined by TD Cowen. Potential additional taxes on new EV acquisitions, like those proposed by Senate Republicans, hang like a cloud over consumer sentiment. These factors collectively contributed to recent pressure on Lucid’s stock price, recorded at $2.035 on Mar 13, 2025. The stock has shown some vulnerability in recent market activity, falling from an opening price of $2.16 on Mar 13, 2025, to its close at $2.035.

Could Lucid pull an unforeseen revival from this point, or will its trajectory continue downward, aligning with the recent analyst downgrades? The complexities of the EV markets make this a watchful moment for stakeholders looking to adjust their positions.

Is It Time to Re-evaluate Your Position on LCID Stock?

With a market defined by its volatility, Lucid Group’s latest challenges have raised questions among traders. The company’s prospects now seem hinged on improving cost efficiencies and recovering the confidence of its backers. Even with a solid cash position of $1.61 billion as of Dec 31, 2024, and a leveraged ratio of 2.5, the company’s financial health warrants a closer look.

The road ahead is bumpy, littered with uncertainties from internal changes to regulatory challenges. Traders look for signs of solid management strategies to steer the EV manufacturer beyond its current hurdles. As millionaire penny stock trader and teacher Tim Sykes says, “Preparation plus patience leads to big profits.” As it stands, Lucid’s recent steps leave its stock under scrutiny — perhaps sparking a moment for long-term traders to ponder over future stakes. Could there be a turnaround on the horizon, or is it merely a bubble poised to burst? The coming days hold the answer to these questions.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”