Editor’s Note: This article was updated to correct information on delivery targets.
Lucid Inc. (NASDAQ:LCID) will release its fourth quarter and full-year 2021 earnings on Monday, Feb. 28, after the market closes. If Lucid provides guidance for 2022, it is possible LCID stock could move quite significantly.
So far, the electric vehicle (EV) manufacturer has not provided any kind of pre-release guidance about production so far. The company went public in July 2021 with a reverse merger.
Investors should expect to see Lucid show solid progress in the production of its EVs. As a result, if guidance is more upbeat than presently forecast by analysts, LCID stock could move higher.
The stock has taken a beating in the last three months. Lucid peaked at $55.52 per share on Nov. 16, but by Feb. 24 it was down to $24.48. That represents a huge decline of more than 55.9% from its peak.
Moreover, year-to-date (YTD), LCID stock is down 35.66% from where it ended last year at $38.05 per share.
Where Things Stand With Lucid
The Lucid Air model is currently being built and sold from the company’s Casa Grande, Arizona plant (just south of Phoenix). This is a large, luxury EV sedan with a high price point. The Lucid Air starts at a price of $77,400 and goes up from there, depending on its configuration.
It will be important to see whether the company is able to slice out a chunk of the luxury EV sedan market. This will mainly be seen in the company’s forecasts for its 2022 deliveries.
For example, as it now stands, Lucid’s prior forecasts has predicted that during 2023, it will produce and deliver 50,000 EVs. This is after its forecast of 20,000 for 2022. This can be seen on page 65 of the document.
The 2023 prediction includes the introduction of a sport-utility vehicle (SUV) model. Lucid projects it will deliver 12,000 of these EV SUVs during 2022.
So, if the company says there will be any kind of slippage from this run-rate for its SUV production, the stock could react negatively. On the other hand, if Lucid affirms these projections or raises them, then LCID stock could rise.
Where This Leaves LCID Stock
At this point, most investors are likely to take a “wait and see” approach to LCID stock. Analysts will have to revise their models. Once they review 2021 and any comments Lucid makes about existing production and sales in Q1, they will assess its valuation.
Without blowout Q4 numbers, they may consider the stock fully valued at the present time. Therefore, most patient investors will wait for an opportunity to buy in at a cheaper price.
As it stands, analysts project revenue will hit $61.53 million for 2021 and just over $2 billion for 2022. This is based on the average of six analysts for both 2021 and 2022.
Given that Lucid had a market capitalization of just over $42 billion as of Feb. 24, according to Seeking Alpha, that puts LCID stock on a price-to-sales (P/S) of 21 times.
So, in effect, the market is fully discounting all of 2022 and is looking forward by two more years. For example, the production model calls for 90,000 EVs to be delivered by 2024 and revenue to hit $9.93 billion. That puts it on a three-year forward P/S multiple of just 2.2 times sales. However, that multiple will be higher if adjusted on a present-value basis.
The bottom line is that LCID stock already discounts some pretty good numbers for the future. If the company’s forecasts are better than its original slide presentation, expect to see fireworks in LCID stock. Given how strong the EV market is now, I suspect this will be the case.
On the date of publication, Mark Hake did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Mark Hake writes about personal finance at mrhake.medium.com and Newsbreak.com and runs the Total Yield Value Guide which you can review here.
