Lucid Group, Inc. (NASDAQ:LCID) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Investors in Lucid Group, Inc. (NASDAQ:LCID) had a good week, as its shares rose 7.1% to close at US$3.30 following the release of its full-year results. It was a moderately negative result overall - revenue fell 3.9% short of analyst estimates at US$595m, and statutory losses were in line with analyst expectations, at US$1.36 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Lucid Group

Taking into account the latest results, the consensus forecast from Lucid Group's twelve analysts is for revenues of US$801.2m in 2024. This reflects a substantial 35% improvement in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 12% from last year to US$1.09. Before this earnings announcement, the analysts had been modelling revenues of US$1.32b and losses of US$1.12 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.

The analysts have cut their price target 19% to US$3.77per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Lucid Group analyst has a price target of US$6.00 per share, while the most pessimistic values it at US$1.75. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Lucid Group's revenue growth is expected to slow, with the forecast 35% annualised growth rate until the end of 2024 being well below the historical 96% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 14% per year. So it's pretty clear that, while Lucid Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. They also downgraded Lucid Group's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Lucid Group's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Lucid Group analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Lucid Group you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.