TLDR
- Lucid Group’s stock has fallen nearly 30% since the beginning of the year despite analysts expecting 94% revenue growth in 2025
- CEO Peter Rawlinson stepped down in February 2025 after 12 years, creating uncertainty about the company’s future direction
- Lucid has begun shipments of its new Gravity SUV, doubling its product lineup
- The company plans to launch mass market vehicles priced under $50,000 in 2026
- Hedge fund interest remains notable with 24 funds holding positions in LCID according to Q4 2024 data
Lucid Group has experienced a challenging start to 2025, with its stock price declining nearly 30% since the beginning of the year. This drop comes despite analyst projections of almost 100% revenue growth over the next 12 months, creating what some see as a potential buying opportunity for long-term investors.
The electric vehicle manufacturer, like many in its sector, has faced headwinds affecting its valuation. While EV sales grew in the US last year, they fell below expectations for most manufacturers outside of Tesla.
Market uncertainty has been amplified by discussions about potentially repealing EV subsidies, which could impact consumer demand. This uncertainty has led investors to assign lower valuations to companies in the EV space.
A significant development affecting investor confidence was the February 25 announcement that CEO Peter Rawlinson would step down after 12 years leading the company. The abrupt nature of this departure sent shares on a multi-week slide.
Marc Winterhoff, previously Lucid’s Chief Operating Officer, has been named Interim CEO while the board searches for a permanent replacement. Rawlinson has transitioned to a role as Strategic Technical Advisor to the Chairman.
Analyst expectations of 94% sales growth in 2025
Despite these challenges, Lucid has reached an important milestone with the start of shipments for its Gravity SUV platform. This addition effectively doubles the company’s product lineup and is a major factor behind analyst expectations of 94% sales growth in 2025.
The company reported full-year 2024 revenue of $807.8 million, reflecting delivery growth of 71% year-over-year with 10,241 vehicles delivered. Lucid met its production guidance of 9,000 units for 2024.
For 2025, Lucid projects production to more than double to 20,000 vehicles. This growth trajectory is expected to continue into 2026, when the company plans to begin launching several new mass market vehicles with price points under $50,000.
Plans for more affordable models
These more affordable models could potentially unlock millions of new customers, similar to what Tesla achieved with its Model Y and Model 3 vehicles. However, some analysts express skepticism about Lucid’s ability to bring these vehicles to market by the end of next year.
Financial challenges remain evident in the company’s performance. Despite delivery growth, Lucid posted a GAAP net loss of $1.25 per share for 2024, with a non-GAAP net loss of $1.04 per share.
The company maintains a strong liquidity position of $6.13 billion, which provides a cash runway for its planned expansion. However, analysts note that Lucid will likely need to raise additional capital to scale production of its planned mass market vehicles.
With gross margins still in negative territory, the company will probably remain dependent on outside investors through its product launch period. The recent CEO departure adds further uncertainty to the projected timeline for new vehicle launches.
7th most active US stock based on hedge fund interest
According to recent data, Lucid ranks as the 7th most active US stock based on hedge fund interest. As of Q4 2024, 24 hedge funds held positions in the company, indicating continued institutional interest despite the market challenges.
Trading volume data shows the stock remains highly liquid, providing investors the flexibility to enter and exit positions efficiently. This liquidity is particularly valued by hedge funds that employ strategies such as momentum trading and arbitrage.
For potential investors, Lucid presents a mixed picture. The projected growth this year is promising but not guaranteed, and the potential growth in 2026 carries even more uncertainty.
The stock may be suitable for patient and aggressive growth investors willing to accept short-term volatility for potential long-term gains. Those looking to capitalize on a high-growth stock at a historical discount might find Lucid shares appealing, but should be prepared for continued market uncertainty in the EV sector.
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