Lucid stock rallies as vehicle deliveries up 90% YoY

On Monday, Lucid Group (NASDAQ: LCID) reported on its third quarter vehicle deliveries and production.

In the quarter, which ended on September 30, the automaker delivered 2,781 vehicles, far outpacing analyst estimates of 2,242. In the last quarter, LCID delivered 2,394 vehicles.

While this was a significant beat in terms of expectations, it was marred by less impressive production numbers. The company produced 1,805 vehicles in the quarter, down from 2,110 in the preceding three-month period, missing the mark compared to analyst estimates of 2,267.

Overall, although the numbers are a mixed bag, they do represent solid momentum — in the same period last year, the company only produced 1,550 vehicles and delivered 1,457 — to put things into perspective, deliveries are up 90.8% year-over-year (YoY), while production is up 54.4% over the same period.

LCID stock performance

The much-needed win comes at a crucial time for Lucid, whose shares have shed 18.31% over the course of the year, although the last six months have seen significant recovery, with the stock being up 28.11% in that timeframe.  

At press time on Monday, LCID shares have rallied by 1.65% up to $3.40 possibly signaling a shift toward more bullish sentiment.

Rising production and delivery numbers, although the former are lagging analyst expectations, are a decently strong bullish signal — particularly as the availability of cheaper, hybrid cars and the present high interest rate environment isn’t beneficial toward EV companies.

On August 5, Lucid announced its biggest investor, the Saudi Public Investment Fund (PIF) will provide an additional $1.5 billion in cash for the purpose of ramping up the production of LCID’s highly-anticipated Gravity SUV.

While that is certainly positive news, the company would have to produce more than 3,000 vehicles in Q4 to meet its goal of 9,000 vehicles this year — an increasingly difficult prospect once the competition in Tesla’s (NASDAQ: TSLA) Model X and Rivian’s (NASDAQ: RIVN) R1 is factored in.

Still, in the long term, the company’s partnership with the Middle Eastern kingdom could see it meeting production and delivery targets regularly, which would serve to pacify investor concerns. The company currently operates a factory in Saudi Arabia — although it has not fully ramped up production, and the facilities are more geared toward assembly rather than full-scale production.

Investors should keep a close eye on the company’s next earnings call, scheduled for November 7 — even if the stated goal of 9,000 vehicles is not met, consistent increases in production and deliveries together with a reasonable valuation would make LCID a decent long-term play. As it stands, Wall Street is extremely bearish on the stock — but we could see a shift in ratings, as well as updated price targets in the near future.