The latest analyst coverage could presage a bad day for Lucid Group, Inc. (NASDAQ:LCID), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
After this downgrade, Lucid Group’s twelve analysts are now forecasting revenues of US$843m in 2024. This would be a sizeable 42% improvement in sales compared to the last 12 months. Losses are forecast to narrow 9.5% to US$1.11 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$1.3b and losses of US$1.12 per share in 2024. So there’s definitely been a change in sentiment in this update, with the analysts administering a substantial haircut to this year’s revenue estimates, while at the same time holding losses per share steady.
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the analysts have cut their price target 18% to US$3.81 per share, signalling that the declining revenue and ongoing losses are contributing to the lower valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Lucid Group’s past performance and to peers in the same industry. It’s pretty clear that there is an expectation that Lucid Group’s revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 42% growth on an annualised basis. This is compared to a historical growth rate of 96% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% per year. So it’s pretty clear that, while Lucid Group’s revenue growth is expected to slow, it’s still expected to grow faster than the industry itself.
The Bottom Line
Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn’t be surprised if the market became a lot more cautious on Lucid Group after today.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Lucid Group going out to 2026, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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Find out whether Lucid Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
