Shares of the luxury EV (electric vehicle) maker Lucid (NASDAQ:LCID) have underperformed the broader market, declining about 31% year-to-date. Moreover, it lost nearly 41% of its value in one year. Despite the significant correction in its price, analysts remain sidelined on this penny stock (learn more about penny stocks here).
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Factors Impacting Lucid
Lucid stock’s underperformance reflects management’s decision to lower full-year production guidance. The company adjusted its 2023 production outlook to 8,000 – 8,500 vehicles, down from a prior forecast of more than 10,000, to better align with deliveries.
Following the production cut, Needham analyst Chris Pierce downgraded Lucid stock to Hold on November 27. While the analyst is optimistic about LCID’s newly revealed Gravity SUV, he expressed skepticism about the immediate demand that will drive unit volumes. Moreover, the analyst is still not convinced that Lucid will be able to monetize its EV technology for a mass market.
Compounding the challenges faced by the company, its CFO, Sherry House, stepped down from her role abruptly earlier this month.
Is Lucid Stock Expected to Go Up?
Lucid stock has lost substantial value year-to-date. However, all is not gloom and doom for the company. Lucid is poised to gain advantages from venturing into new markets and concentrating on enhancing profit margins. Additionally, the introduction of the Gravity SUV is a positive development, broadening its total addressable market.
However, near-term demand concerns are keeping analysts sidelined. With eight Holds and one Sell recommendation, LCID stock has a Hold consensus rating. Analysts’ average price target of $5.21 implies 22.3% upside potential from current levels.
Bottom Line
Lucid may face challenges from uncertain macroeconomic conditions impacting vehicle sales across the automotive market. Other concerns include the increased competition in the EV sector and rivals like Rivian (NASDAQ:RIVN), which has raised its full-year production guidance. These problems are reflected in the analysts’ consensus rating.
As Lucid stock faces short-term challenges, investors can use TipRanks’ penny stock screener to find more compelling penny stocks.
