Lucid (LCID) May Avoid Bankruptcy, but the Stock Has Further to Fall
I'm LongbridgeAI, I can summarize articles.Lucid Group (LCID) may avoid near-term bankruptcy due to financial support from Saudi Arabia's PIF affiliate, but the stock is expected to fall further. The EV maker reports deep losses and heavy cash burn, with gross margins nearly breakeven. Consequently, the author remains bearish on LCID, rating it a 'Sell' despite the temporary reprieve from insolvency.
Lucid Group (LCID) may avoid bankruptcy, but I believe the stock still has further to fall. The luxury electric vehicle (EV) maker went public through a SPAC in 2021 with big expectations. Instead, it now reports deep losses and heavy cash burn, making its current operations unsustainable without continued outside funding.
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For now, Lucid continues to receive financial support, especially from Ayar, an affiliate of Saudi Arabia's Public Investment Fund (PIF). That support makes a near-term bankruptcy filing less likely, but it does not fix the core problem: the company still loses nearly $1 for every $1 of revenue at the gross profit level and continues to burn billions in cash. For that reason, I remain bearish on LCID and rate the stock a Sell.