You deserve to start off 2024 with fresh, high-confidence stock picks. Unfortunately, Lucid Group (NASDAQ:LCID) stock has multiple problems and the bull case for just doesn’t hold up. The EV market is fiercely competitive, with significant changes from 2020 and 2021, when investors were more speculative and forgiving of consistently unprofitable companies.
Given recent interest-rate hikes, investors are now more selective and should not overlook Lucid Group’s issues. Financial traders should think long and hard if they’re considering Lucid stock for 2024.
Wrapping up a Not-So-Great Year for LCID Stock
We don’t have a crystal ball to tell you what will happen to LCID stock in 2024. However, we can observe what took place in 2023 for the stock and the company.
As it turned out, Lucid stock started 2023 at $6 and change and ended the year at $4.21. In contrast, investors could have bought practically any major-market index fund and fared much better than if they had held shares of Lucid Group.
Truthfully, it just wasn’t a good year for Lucid Group. The company enacted one of the most eye-popping mass layoffs of 2023. In March, Lucid announced an 18% workforce reduction, amounting to approximately 1,300 laid-off employees.
As the year progressed and the stock market marched higher, Lucid Group had one issue after another. First, Lucid downward-revised its full-year production outlook. Also, the company’s chief financial officer (CFO), Sherry House, abruptly resigned.
In case all of that wasn’t bad enough, Lucid Group also got removed from the Nasdaq 100 index. Needham analysts downgraded LCID stock from “buy” to “hold,” citing a lack of faith in near-term EV demand and “weak demand for the company’s vehicles.”
Another Analyst Warns Investors About Lucid Group
The Needham analysts weren’t the only ones to sound the alarm on Lucid Group in 2023. Recently, Blanke Schein Wealth Management Chief Investment Officer made it crystal clear that he’s not recommending LCID stock.
Per Yahoo! Finance, Schein cited the “overall difficulties the EV industry is facing.” This reinforces our point that, in a challenging EV market, investors should focus their attention on the most promising companies and avoid the rest.
Schein also cited the sudden resignation of Lucid Group’s CFO as a concern. Moreover, Schein cited Lucid’s “weaker financials and a high cash-burn rate.”
For what it’s worth, Schein did reportedly state that Lucid stock “could rise if there is short covering activity.” Yet, there’s certainly no guarantee that a short squeeze will occur.
New Year’s Resolution: Be Very Careful With Lucid Stock
We sincerely hope that you’ll start off the new year on the right foot. This means being picky and avoiding problematic businesses in fiercely competitive fields.
Therefore, it’s fine to watch Lucid Group from the sidelines, but there’s no urgent need to invest in the company now. When all is said and done, we hope you’ll find more promising places to allocate your hard-earned capital in 2024 than LCID stock.
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.
