No need to take a low-probability trade as LCID stock has been a poor performer in 2023
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Despite electric vehicle manufacturer Lucid Group’s (NASDAQ:LCID) problems, at least we can say one positive thing. For what it’s worth, Lucid Group adopted the EV charging standard of a much more famous and successful vehicle maker. However, that’s not enough for us to give LCID stock anything better than a “D” grade.
Sure, the buyers can brag about Lucid Group’s attractive and powerful vehicles. That’s all fine and well, but the bottom line is the bottom line. As long as Lucid remains unprofitable and doesn’t expect to produce many EVs, investors won’t find a favorable risk-to-reward profile here.
Lucid Group Relents and Adopts Tesla’s Charging Standard
Here’s one piece of positive news for LCID stockholders. Lucid Group finally adopted Tesla’s (NASDAQ:TSLA) EV charging standard. This means Lucid’s drivers, assuming they have the right equipment, will charge their vehicles on the Tesla Supercharger network (or, to use the most accurate name, the North American Charging Standard).
Don’t get too excited, though. Lucid Group’s drivers won’t actually be able to use the Tesla Supercharger network until 2025. Besides, Lucid is late to the party. Other automakers already made their EVs compatible with the Tesla Supercharger network.
Since it took so long for Lucid to do this, investors might get the feeling that Lucid Group is only reluctantly adopting Tesla’s charging standard. Ultimately, it’s up to you to make an assessment on this. Some people might say, “Better late than never.” However, other investors might say, “Too little, too late.”
Why LCID Stock Isn’t a High-Confidence Pick
LCID stock has performed poorly throughout the year, including after Lucid Group released its third-quarter 2023 results. Recently, the stock fell below $4 for the first time in its existence.
You can’t say we didn’t warn you. We told you about how Lucid Group continues to post one unprofitable quarter after another. 2023’s third quarter continued this unfortunate pattern as Lucid reported an earnings loss of 28 cents per share.
Lucid Group generated revenue of $137.814 million, versus $195.457 in the year-earlier quarter. That result fell short of Wall Street’s call for $177 million in quarterly revenue.
In addition, Lucid lowered its full-year 2023 EV production guidance from “more than 10,000” units to a range of 8,000 to 8,500 units. That’s definitely not a positive sign. Plus, Lucid Group only produced 1,550 vehicles in Q3, which wouldn’t even add up to 8,000 units if you annualized it (i.e., multiplied it by four).
LCID Stock: The Bullish Argument Doesn’t Hold Water
It’s fine that Lucid Group adopted Tesla’s EV charging standard, but this won’t even take effect until 2025. Meanwhile, Lucid shares have lost significant value and the company’s reduced vehicle production guidance is worrisome.
The bull case for Lucid Group doesn’t hold up under scrutiny. LCID stock gets a “D” grade and investors shouldn’t expect a miraculous recovery anytime in the near future.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.