Lucid Air in a glass container
Source: Lucid Group Facebook

Lucid (LCID) Stock Is a Good Long-Term Investment Amid EV Push

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Sep. 13 2021, Published 1:34 p.m. ET

On July 26, Lucid Group (LCID) went public after merging with blank-check company Churchill Capital IV (CCIV). The stock has plummeted about 25 percent since then. What’s the 2025 forecast for LCID stock and is it a good long-term investment?

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Lucid Motors, an electric vehicle company, has announced a "Production Preview Week" beginning Sept. 27. Chosen individuals will be granted access to its factory in Casa Grande, Ariz. Visitors will be able to witness how the company's first luxury car, the Lucid Air, is produced and they will also get to test drive it.

is lucid lcid stock a good investment
Source: Lucid Group Facebook
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Lucid stock is falling.

Lucid stock was hit hard along with other electric vehicle start-up companies, which tanked on high valuations due to fears of slowing development in the industry. The manufacturing at major automakers has hit a snag due to severe shortage of semiconductor chips. The expiration of a lockup period in late August, which now permits institutional investors to sell their shares in Lucid Group, added to the stock's pressure.

Lucid stock target price

On Sept. 9, Citigroup analyst Itay Michaeli initiated coverage of Lucid stock with a buy recommendation and a target price of $28. In a research note, Michaeli said, “The company offers leading electric vehicle technology credentials, years of development experience, brand momentum and speed-to-market.” He added, “Lucid resembles much of what we like about Tesla, but without the lofty 2030 share & FSD/AV outcomes that one must underwrite.”

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CFRA Research also initiated coverage of Lucid stock shortly after Citigroup published their rating for the stock. CFRA has a buy rating with a target price of $25.

is lucid lcid stock a good investment
Source: Lucid Group Facebook
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Lucid stock forecast for 2025

As of July 26, Lucid has received about 11,000 paid reservations for the Lucid Air, with the Dream Edition completely sold out. The company has opened eight showrooms, intends to start deliveries this year, and hopes to reach the European and Middle East markets in 2022.

Lucid expects to post revenues of $14 billion in 2025 and expects its EBITDA to rise to $1.7 billion in that year. Currently, Lucid has a market cap of around $32.7 billion, which gives us 2025 price-to-sales and price-to-EBITDA multiples of around 2.3x and 19.2x, respectively. Lucid plans to deliver 135,000 vehicles in 2025 compared to 20,000 in 2022.

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Why Lucid looks like a good investment

Lucid hasn’t delivered any vehicles yet, but its claims about Lucid Air’s long-range, rapid charging, and low-cost battery pack have garnered a lot of traction among EV enthusiasts. Lucid investors hope for an official date for car delivery during the Production Preview Week. Starting the fourth quarter without a definite date might cause shareholders to panic.

Other factors that caught Lucid investors' attention include the integrated internal manufacturing process that designs and manufactures everything from inverters, battery packs, and engine and transmission to charging systems and software. The company is led by the former Tesla Model S Chief Engineer Peter Rawlinson. Overall, Lucid stock can be a good long-term investment if the company can execute well.

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