Since free-cash-flow is negative at this point, doing a traditional discounted cash-flow analysis is most likely not going to yield anything. Many analysts will have different predictions for Lucid Motors, so it’s best to form your own opinion.īecause Lucid Motors is a growth company with unproven profitability, you’ll need to base your estimates on future projected growth of revenues on looking at gross and EBITDA margins of other similar competitors to gauge what could be Lucid Motors’ in the future. Use both your own research and the reports of other analysts to determine the stock’s value. Since Lucid Motors produces high-end luxury electric vehicles, they may find buyers in the cash-rich Kingdom, which has led the company to adopt a different expansion strategy than other EV manufacturers.īefore you decide to buy Lucid Motors stock, you should figure out how much you think the company will make in sales in the future. However, estimates for growing companies like Lucid Motors can be in a wide range since it’s difficult to estimate with any accuracy the true growth during this phase.Īlso, Lucid Motors and the Saudi Arabian Ministry of Investment signed an agreement in 2022 that will allow Lucid Motors to build its first manufacturing facility outside of the United States in Saudi Arabia.Īt its King Abdullah Economic City plant in Saudi Arabia, Lucid Motors plans to produce up to 150,000 electric vehicles annually. The unexpected outlook shocked many shareholders, sending the stock tumbling. This cut the original estimate by 6,000 to 8,000. In February, Lucid Motors cut its original estimate for how many Lucid Air electric cars would be made in 2022 from 20,000 to 14,000. Lucid Motors has felt the effects ever since the company’s new production plan was made public. However, investors sold quickly, and Lucid Motors’ long-term potential in the market for electric cars may now be undervalued. In November 2021, the stock price hit a new high. The stock of Lucid Motors started to go up after the company said it would start delivering electric vehicles to customers in October 2021. To get a better idea of what’s going on, the first step is to read the company’s annual report as well as the investor presentations. It’s up to you to decide how Lucid Motors should be placed in your portfolio and whether you think the business model will work in the long run. As of the last 12 months, the company has produced $377 million in revenue and trades at a market cap of $12 billion at the time of writing.Īs an investor, you need to weigh the pros and cons of Lucid Motor’s business model and decide for yourself if adding this stock to your portfolio meets your investing goals. The Tesla brand is by far the most recognized when it comes to EV manufacturing.Īnother drawback of Lucid Motors is the high valuation premium investors are putting on the company. Weaknesses include the harsh competition among new and existing EV manufacturers as well as traditional automakers beginning to manufacture their own EVs.Ĭompetition includes Tesla, Porsche, Rivian, and Audi. The Lucid Air’s unchallenged 520-mile range on a single charge is also remarkable for a new EV player, as is its discounted price versus the Tesla Model S EV. Lucid Motors’ CEO, Peter Rawlinson, has a very impressive work history, having worked at Tesla as the chief engineer of the Model S. The strengths of the company may include good management. It has details about the company and its products, as well as a section for investors. Lucid Motor’s website is a good place to look for information about the company. By reading some of Lucid Motor’s biggest competitors’ annual reports, you’ll get a good feel for the industry. Understanding Lucid Motors’ rivals requires reading their annual reports as well. In the case of Lucid Motors, it’s a relatively new company that is competing against more established players such as Tesla.ĭo some research on Lucid Motor’s closest competition, which includes Tesla, NIO, BYTON, and Rivian Automotive. However, if you’re more introverted and would rather not reach out to other people, then you can get a good overview of the EV sector and how it will develop by reading Lucid Motor’s annual report. Your immediate network can tell you a lot about industry trends and how they change over time. Maybe some of your friends own a Lucid car! Some probably will not have heard of Lucid Motors before, while Tesla usually takes the spotlight away from competitors.ĭo your own due diligence. Read the newspaper, go online to forums, and also ask coworkers and friends what they think about the electric vehicle industry.
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