The Lucid (NASDAQ:LCID) story could have a flourish to it but at least in the present, it isn’t anything close to inspiring. LCID stock is found stuttering due to the electric vehicle (EV) maker’s execution issues, with supply chain constraints adding an additional element of risk.

The maker of high-end luxury sedans, going by the name “Air,” made a high-profile public debut in late July 2021. The company chose the special purpose acquisition company (SPAC) route, and its merger with blank-check company Churchill Capital Corp IV fetched it $4.5 billion in new capital.

LCID stock has come notably off its record high of $57.75 reached on Nov. 17, 2021. Lucid bulls could argue that so have other stocks in the sector, including EV market leader Tesla (NASDAQ:TSLA). But one has to keep in mind that Lucid still has much more to prove and, even with the pullback, there seems to be a disconnect between fundamentals and valuation.

LCID Stock Hits Air Pocket

Following the SPAC business combination, LCID began trading on the Nasdaq on July 26, 2021. The stock never took off until late October and was witnessing more of a range-bound move.

It was then irrational exuberance took hold, kickstarting a rally. Of course, there was a catalyst that gave wings to the rally. Lucid confirmed on Oct. 27 that it would begin the first deliveries of its Air sedan in another three days. From $26.38 ahead of the announcement, the stock rose unhindered before topping out in mid-November.

There isn’t much to write home about the stock trajectory thereafter, with pullbacks and sideways moves occurring intermittently. Ahead of Lucid’s fourth-quarter earnings release, it looked like the stock may be ready for a breakout, encouraged by the broader market recovery. However, it was not to be.

Lucid’s Q4 Disappoints

Expectations were muted ahead of the earnings report released late Monday. Whispers around the Street and analysts’ calls had prepared LCID stock investors for an anemic deliveries number for the fourth quarter.

Morgan Stanley analyst Adam Jonas suggested that a deliveries miss shouldn’t matter. Instead, the spotlight should be on the 2022 deliveries outlook and the reservations, he said.

The fourth-quarter results, therefore, should not come as a shocker.

Lucid delivered 125 cars, translating to vehicle sales of $21.3 million. Total revenues came in at $26.4 million, trailing the consensus estimate of $36.74 million. The loss per share of $0.64 was nearly double the loss expected by analysts.

Lucid CEO Peter Rawlinson, however, put up a brave face. He said in a statement, “We remain confident in our ability to capture the tremendous opportunities ahead given our technology leadership and strong demand for our cars.”

Supply Chain Woes, Execution Hurt Outlook

What really spooked investors was the downward adjustment of the deliveries outlook. Lucid now expects to sell 12,000 to 14,000 units of Air sedans, down notably from the 20,000 units it aimed for in mid-November when it released its third-quarter results. The predicament was blamed on supply chain issues and the focus on quality.

Lucid is right in being cautious. Earlier this month, the company issued a recall of 188 vehicles due to incorrect installation of the snap ring below the front damper lower spring seat by its supplier.

Reservation numbers, however, are far more encouraging. Lucid said it has over 25,000 customer reservations, potentially translating to revenues of more than $2.4 billion. Does the company have the wherewithal to make and deliver as many vehicles?

Possibly so. Lucid said expansion plans at its Arizona manufacturing plant is on track. The EV maker is also eyeing another manufacturing plant in Saudi Arabia. At a conference held in Riyadh in October, Rawlinson said the Middle eastern country is the second biggest market for the company, going by preorders.

Lucid sees Saudi Arabia as a $3.4 billion opportunity for the company over the next decade and a half.

The company has a war chest of more than $6.2 billion at the end of 2021, making their cash position sound.

Will LCID Stock Take Flight?

The post-earnings sell-off in Monday’s after-hours session sent LCID stock crashing below the closing level on its debut session.

Lucid is currently selling its high-end Air Dream Edition, which is priced at $169,000. The other trim levels comprise the base model Air Pure, Touring and Grand Touring. Rawlinson said on the earnings call that the company has started delivering the Grand Touring, priced at $139,000, as well.

Assuming Lucid weathers the external and internal issues and keeps its tryst with its deliveries guidance for 2022, it could rake in vehicle sales of about $2.2 billion. This is based on the mid-point of the deliveries outlook and assuming a 90:10 product mix of Dream Edition and Grand Touring.

Notwithstanding the pullback, LCID stock is currently trading at 31.4 times its estimated sales for 2022. This looks pricey compared to Tesla’s 11.1 times but cheaper than Fisker’s (NYSE:FSR) 47.9. Chinese EV maker Nio (NYSE:NIO), meanwhile, is valued at an anemic 6.1 times on its estimated sales for 2022.

Although LCID stock’s valuation doesn’t look very stretched, it does appear a little unattractive, considering the macroeconomic, geopolitical and execution risks.

Bottom Line on LCID Stock

Lucid has its task cut out now. It cannot afford to have any further production shortfalls or quality issues. The company has to stay laser focused on quality and work out ways to circumvent supply chain disruptions in order to deliver. Cash, as seen by the numbers, should not be an issue. Moreover, the company has the backing of the cash-rich Saudi Arabian Public Investment Fund.

Even Tesla was on the brink once when it was ramping its Model 3 sedans. Lucid should, therefore, be given time to sail through the teething troubles and show up.

Patience is a virtue. Lucid could be a good long-term bet for those investors willing to play the waiting game. The short-term, however, could prove turbulent for the stock.

On the date of publication, Shanthi Rexaline did not have (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.