Lucid shares just slipped 15%: explore why

Shares of Lucid Group Inc (NASDAQ: LCID) are down nearly 15% in extended trading on Wednesday after the electric vehicles manufacturer reported weaker-than-expected quarterly revenue and lowered its outlook for production volume.

Lucid Q2 financial highlights

• Lost 33 cents a share versus the year-ago $1.17 a share
• Revenue jumped to $97.3 million, up from last year’s $174,000
• Consensus was 39 cents of per-share loss on $145 million in revenue
• Delivered 679 vehicles; a year-over-year increase of 89%
• Ended the quarter with 37,000 reservations for its EVs

Lucid has a strong balance sheet

Lucid had $4.60 billion in cash, equivalents, and investments at the end of its fiscal Q2 – sufficient to fund operations well into 2023. In the earnings press release, CFO Sherry House said:

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Our Q2 revenue was primarily driven by higher customer deliveries of Lucid Air vehicles. Despite immediate challenges, we believe bringing our logistics centre on-site at our Arizona factory will help reduce complexity, cut down lead times, and reduce various costs.

Lucid shares are now down more than 50% from their year-to-date high.

Lucid shares hit on production outlook

Lucid cut its forecast for production volume in half on Wednesday. It now expects to make 6,000 to 7,000 electric vehicles this year. Explaining why, CEO Peter Rawlinson wrote:

Our revised production guidance reflects the extraordinary supply chain and logistics challenges we encountered. We’ve identified the primary bottlenecks and we’re taking appropriate measures – bringing our logistics operations in-house, adding key hires to the executive team, and restructuring our logistics and manufacturing organisation.

Wall Street currently rates Lucid shares at “overweight” with upside to $30 on average – a close to 70% upside from here.