Lucid Group (LCID): Assessing Valuation After Record Q3 Deliveries Miss Wall Street Targets and Forecast Narrows

Lucid Group (LCID) just posted record third-quarter deliveries, coming in higher than last year but slightly below what investors were hoping for. A wave of buyers rushed to beat the expiring federal EV tax credit, which added an extra boost.

See our latest analysis for Lucid Group.

Even with Lucid’s record Q3 deliveries and a high-profile robotaxi partnership, shares have been volatile. After a recent bump, the share price is now down about 31% year-to-date and the one-year total shareholder return sits at -38%, reflecting persistent worries about demand and production targets as federal incentives wane. Momentum has faded considerably from last year, with ongoing challenges putting longer-term growth potential under the spotlight.

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After such a turbulent stretch, does Lucid’s recent selloff present a clear buying opportunity for value-seeking investors, or is the market already factoring in all the company’s risks and future growth prospects?

Most Popular Narrative: 11.8% Undervalued

Lucid’s fair value, as estimated by the most popular narrative, sits at $23.79, which is higher than the last close of $20.98. This hints at unrealized potential if key strategic moves bear fruit.

The newly announced Uber and Nuro partnership, including a planned $300 million Uber investment and a commitment to deploy at least 20,000 Lucid Gravity vehicles as robotaxis over six years, is expected to open a large and fast-growing autonomous fleet market to Lucid, driving significant revenue expansion and potential margin improvement via technology licensing and high-volume fleet sales.

Read the complete narrative.

Want the full playbook? This narrative builds its bullish stance on aggressive expansion, vertical integration, and a bold shift in Lucid’s business model. The underlying financial assumptions could surprise you. Peek inside to discover how projections for rapid scaling and premium positioning form the core of this value thesis.

Result: Fair Value of $23.79 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent negative gross margins and ongoing dilution risk from capital raises could quickly undermine the narrative, especially if manufacturing or demand challenges become more severe.

Find out about the key risks to this Lucid Group narrative.

Another View: Looking at Sales Ratios

While analyst narratives point to upside, the actual price-to-sales ratio may raise eyebrows. Lucid trades at 6.9 times sales, which is far steeper than the US Auto industry average of 1.3 and the peer average of 2. This premium leaves little room for error, especially since the fair ratio could be as low as 0.1. Does the market believe Lucid's growth story, or is it setting up high expectations?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Lucid Group Narrative

If you think the numbers tell a different story, or want to dive in and craft your own perspective, you can build a narrative in just a few minutes: Do it your way

A great starting point for your Lucid Group research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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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.

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