Lucid Earnings: LCID stock drops 13% on soft production outlook

Lucid (LCID) stock is down more than 13% at the start of trading on Thursday as the company's earnings release late Wednesday was hurt by Lucid's poor production guidance. The electric vehicle player, known for its industry-leading battery range of 520 miles in its signature Lucid Air sports sedan, said production would range between 10,000 and 14,000 for the full year. That was just about half of Wall Street's expectation with most analysts prior to the call projecting production between 20,000 to 25,000.

Lucid stock news

Lucid reported GAAP earnings per share of $-0.28 in Q4, which surpassed consensus by about 14 cents. That was the high point though. Revenue just under $258 million came in $16 million short of Wall Street.

Overall, production in the fourth quarter was not bad. Lucid produced 3,493 vehicles in Q4 and delivered 1,932. For the full year of 2022, Lucid produced 7,180 vehicles, which bested the year-ago projection of between 6,000 and 7,000. 

Lucid's high-end guidance of 14,000 vehicles for 2023 means that it does not see a much higher ramp up compared with the fourth quarter. Lucid has more than 28,000 reservations at the moment, which does not include the between 50,000 and 100,000 vehicles that the Saudi government has promised to purchase over the coming decade.

In answer to an analyst question about the lower-than-expected production guidance, management said that certain supplier delays regarding the Lucid Air "Stealth" version may have reduced the production timeline but overall the production guidance was not a setback from their perspective.

"Let me be clear, production is no longer a bottleneck," said CEO & CTO Peter Rawlinson. "We were also able to deliver Lucid Air touring and a small number of Lucid Pure in the fourth quarter and delivered our first Air into Europe and Saudi Arabia as promised. So, we now have the rates of Air covering a spectrum of performance and range on the road today."

Rawlinson said the Sapphire version, which will be the highest-performing version of the Lucid Air, will begin production this summer. Additionally, Lucid's Gravity SUV will begin production in 2024.

Lucid management did not mention any of the rumors surrounding its largest investor – the Saudi Arabia Public Investment Fund. Rumors swirled over the past month that the sovereign wealth fund may be interested in taking Lucid private as its share price has declined over 60% in the past year. A 13F filing filed with the Securities & Exchange Commission (SEC) in mid-February shows the Saudi fund did report raising its stake in Lucid by 9% to 1.11 billion shares. This would give it a 60.6% controlling stake in the company's common shares.

Lucid stock forecast

Now at $8.50 in Thursday's session, Lucid stock is sitting on the range high from January 12. A break there would send LCID down to support from late last month around $7.40. Below there sits the December support level of $6.20. LCID stock has been trending lower since the January 27 high of $17.80 based on those Saudi rumors. The 9-day moving average crossed under the 21-day moving average last Friday, and the bearish crossover on the Moving Average Convergence Divergence (MACD) indicator happend a week before that. Both of these indicators were telling us that a downtrend was imminent. Only a break above $13 will place Lucid stock back in bullish mode.

LCID daily chart