Lucid Group, Inc. (NASDAQ: LCID) on Monday reported a remarkably bad quarter for a company which still carries an enterprise value (EV) of US$12 billion. Revenue and cash flow came in far below estimates, quarterly cash burn topped an astonishing US$1 billion for the first time, and revenue per car sold plunged from 4Q 2023.
In addition, Lucid no longer provided vehicle reservation data as of this quarter, a practice the company had maintained since it began trading under the symbol LCID.
LUCID GROUP, INC.
|Date||Number of Lucid Air Reservations (A)|
|8-May-23||No information provided by company|
Lucid’s 1Q revenue was US$149 million, well below both the consensus estimate of around US$198 million and its 4Q 2022 revenue of US$258 million. The company fell victim to the vicious price war currently taking place in the electric vehicle industry. Remarkably, revenue per vehicle delivered fell 20% sequentially to around US$106,000 in 1Q 2023 from about US$133,000 in 4Q 2022.
Presumably reflecting the difficult demand environment, Lucid slashed its full-year 2023 production forecast to “more than 10,000” vehicles from its previous forecast of 10,000 to 14,000 cars. Interestingly, the current full-year forecast would imply that quarterly production during the rest of the year stays at about the 2,314-production pace of 1Q 2023.
LUCID GROUP, INC.
|(in thousands of US $, except production/delivery unit statistics, revenue/vehicle delivered and shares outstanding)||2023 Management Guidance||Twelve Months Ended 3-31-23||March 31, 2023||December 31, 2022||September 30, 2022|
|Lucid Air Vehicles Delivered||5,415||1,406||1,932||1,398|
|Lucid Air Vehicles Produced||Revised to > 10,000;||2,314||3,493||2,282|
|Revenue per Vehicle Delivered||$129,259||$106,282||$133,392||$139,812|
|Operating Cash Flow||($2,532,873)||($801,264)||($648,515)||($569,466)|
|Capital Expenditures||Revised To ($1,400,000) to ($1,600,000);||($1,131,522)||($241,770)||($289,888)||($290,064)|
|Cash – Period End||Revised to “Sufficient Liquidity into 2Q 2024;”||$2,978,415||$2,978,415||$3,912,996||$3,342,181|
|Debt – Period End||$2,082,197||$2,082,197||$2,083,762||$2,079,722|
|Shares Outstanding (Millions)||1,833||1,833||1,829||1,681|
Lucid’s cash balance fell about US$930 million just in 1Q 2023 to US$2.98 billion as of March 31, 2023 from US$3.91 billion as of December 31, 2022. Inexplicably, after this drawdown Lucid pushed out the time frame that it believes it will have sufficient liquidity without raising additional funds to “into the second quarter of 2024.” In February 2023, Lucid estimated that it had ample liquidity into 1Q 2024.
Regardless of these liquidity comments, investors should be mindful that an additional equity offering could happen at any time. At its current burn rate, Lucid would run out of cash by year-end 2023 if it does not access the capital markets.
Lucid shares have declined nearly 90% since it peaked in November 2021, but the valuation still looks far too robust. Based on its US$7.00 price in after-hours trading on May 8, its EV is, as noted above, about US$12 billion. Lucid’s revenue over the twelve months ended March 31, 2023 totaled about US$700 million, meaning the stock trades at an EV-to-revenue multiple of 17x.
Furthermore, Lucid’s adjusted EBITDA loss over the last twelve months is more than US$2.2 billion. Worryingly, the company’s quarterly losses have been increasing sequentially — US$644 million in 1Q 2023; US$624 million in 4Q 2022; US$553 million in 3Q 2022; and US$414 million in 2Q 2022. The market awarding a US$12 billion valuation to a company with such a cash flow profile is difficult to understand.
Lucid Group, Inc. last traded at US$7.71 on the NASDAQ.
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