Sign InLucid Group, Inc. (LCID) Classified as 'Hold' Amid Mixed Sentiment and Technical Indicators
Summary
Lucid Group, Inc. (LCID) closed at $6.89 on June 30, 2023, with increased trading activity and a marginal increase, while the stock's performance has been volatile, indicating a potential undervaluation and a consensus target that suggests a strong upside potential, though technical indicators suggest a bearish long-term trend and the stock is classified as a 'Hold' for now. (Analysis date: June 30, 2023)
Fundamental Analysis
Lucid Group, Inc. (Ticker: LCID) closed at $6.89 on June 30, 2023, with a marginal increase of 0.01 or 0.15%. The market capitalization of LCID stands at $13.83 billion with 2.01 billion shares outstanding. The company traded at a volume of 72.29 million compared to the average volume of 30.03 million indicating increased trading activity.
The stock traded between $6.64 and $7.18 on its last trading day. However, the stock has a wide one-year trading range between $5.46 and $21.78, noting substantial volatility in the stock's performance.
Lucid is currently a negative earner with an EPS of -$1.43, resulting in a negative price-to-earnings ratio (PE) of -4.82. This effectively means the company is not making a profit, which is typical for a growth company in its early stages.
The expected earnings announcement is scheduled for August 1, 2023, which could provide a catalyst for LCID's performance.
On the discounted cash flow (DCF) front, LCID's DCF of 7.92 which is slightly higher than its last closed price, suggesting the stock might be undervalued.
Investment analysts offer a diverse outlook on the stock with a low target of $12, a median of $18 and a high of $36 whilst the last close price is $6.89. The consensus target is $20.20 per share, implying a strong upside potential from current levels.
News sentiment around LCID is mixed. Several discussions highlight the overhyping of EV stocks, but Lucid's stock is also commended as underestimated by 70% or more. Strategic partnerships with luxury car manufacturers like Aston Martin and the Saudi Arabian investment may add significant value to Lucid.
Technical Analysis
The Relative Strength Index (RSI) at 61 suggests the stock is close to entering an overbought condition. Though this can sometimes be a bullish sign, if the stock enters the overbought region (>70), it might indicate a sell trigger for some short-term traders.
Looking at moving averages, the 50-day moving average is at $6.96, closely matching the recent close price, indicating a neutral trend in the near term. But, the 200-day moving average standing at $9.46 signifies a bearish long-term trend.
The Moving Average Convergence Divergence (MACD, 3-month) value of -0.49 indicates bearish sentiment as MACD line lies below the signal line.
Stock Prediction and Evaluation
For the next trading day, July 3, 2023, a small uptick can be expected given that its DCF value is slightly above the current price and the market's mixed sentiment to Lucid.
In the short term, the analyst consensus median target of $18 suggests an upside. However, this does not consider near-term market fluctuations which are reflected in the stock's price volatility.
Therefore, considering the fundamentals, mixed news sentiment, and technical indicators, Lucid Group, Inc. (LCID) is classified as a 'Hold' for now. Investors may want to wait for a clearer investment catalyst, such as the upcoming earnings report, as well as seek better agreement in technical indicators. As always, potential investors should consider their own risk profile and investment strategy.
