Lucid Group (LCID -1.08%) stock experienced a hard correction in late February. In the middle of the month, shares traded as high as $3.50. As I write this, the share price hovers just above $2.
If you've wanted to buy into high-growth electric vehicle (EV) stocks at a discount, this could be your chance. Lucid shares could surge if the company delivers on one key metric.
NASDAQ: LCID
Key Data Points
This number will determine Lucid's future
Most everyday Americans still haven't heard of Lucid. Most have heard of Lucid's biggest competitor, Tesla, and many have heard of another major EV maker, Rivian Automotive. This disparity in name recognition makes sense given Lucid's relative size. The company produced just $800 million in revenue in 2024. Rivian, meanwhile, generated nearly $5 billion in sales, while Tesla dominated this trio with nearly $100 billion in sales.
Lucid's small sales base can be attributed to a few primary factors, the most important of which is simply the number and type of vehicles it currently sells. As of last year, the company only had one model on the road: the Lucid Air. This luxury sedan starts at $70,000, but based on certain options, the vehicle can cost up to $250,000. Suffice to say that this model is only for high-end buyers looking for a sedan. That's a small market, crowded with competition from other luxury makers, including Tesla's Model S.
On Dec. 31, however, Lucid began deliveries of its Gravity SUV platform. This is also a luxury vehicle with a high price point, but its introduction doubles Lucid's offering, similar to what Tesla achieved when it added the Model X to its lineup. Because Lucid's sales base is so small, analysts are expecting the Gravity SUV platform to have a big impact on revenue growth. Next quarter, estimates call for roughly 50% sales growth, easily outpacing expectations for both Tesla and Rivian. For the full year, analysts are expecting Lucid's sales base to nearly double.
After the recent correction -- the stock is down 22% over the past three months -- Lucid trades at its lowest valuation in years. Could it be time to buy the dip on this high-growth stock?
RIVN PS Ratio data by YCharts
Time to buy this struggling EV stock?
The recent price pressure was due to two primary factors. First, the entire sector experienced a reduction in valuation. Tesla shares, for instance, have shed roughly 30% of their value over the last 30 days. But Lucid was also dealt a unique blow: the transition of its CEO out of the corner office.
On Feb. 25, Lucid announced that Peter Rawlinson would leave his CEO and chief technology officer roles and transition to the role of strategic technical advisor to the chairman of the board. COO Marc Winterhoff was named interim CEO. Rawlinson had been the company's CTO for 12 years and CEO for six.
Should investors buy Lucid stock after the sharp dip in valuation and the stepping aside of a longtime leader? Shares are certainly priced at a discount to former levels. And the Gravity SUV should help sales growth this year.
But I would be paying very close attention to how actual sales growth tracks expectations. If growth occurs, but fails to nearly double sales in 2025 as analysts expect, there could be even more downside. But if Gravity's sales pace exceeds estimates, Lucid's valuation could snap back to previous levels.
But what about the long term? Lucid is planning three new mass market models with affordable price points that could add significant growth to sales. But these new models are likely still years away. Lucid Group is still an enticing option for aggressive growth investors. But there may be better capitalized EV competitors with better visibility into launching mass market models to consider.
