24/7 Wall St. Insights

• The financial situation at Lucid Group Inc. (NASDAQ: LCID) is such that it will never escape the penny stock category.
• Also: Dividend legends to hold forever.

“A penny stock refers to a small company’s stock that typically trades for less than $5 per share.” –Investopedia.

Lucid Group Inc. (NASDAQ: LCID) is trading in penny stock territory, down 54% in the last year to $3.12. In September, it was above $5. Despite a string of what management considers good news, the shares have continued to tumble in the last year, regardless of very brief periods when they rallied slightly.

Part of the stock’s downdraft is the overall slowdown in electric vehicle (EV) sales, which has affected industry leader Tesla Inc. (NASDAQ: TSLA) and legacy manufacturers. These companies have rushed into the EV sector while spending billions of dollars. Ford Motor Co. (NYSE: F) has been the most aggressive among the companies making these investments. It only sells a few thousand EVs a month in the United States.

The most positive news in the last year was an investment from Ayar Third Investment Company, an affiliate of the Public Investment Fund, the Saudi Arabia sovereign fund. The $1 billion, which may be used for capital expenditures and working capital, is unlikely to be enough to support Lucid until it can become profitable, which it likely will never be.

Lucid’s unit numbers are incredibly small. In the first quarter of 2024, Lucid produced 1,728 vehicles and delivered 1,967. The financial figures for the same period were revenue of $173 million, up from $149 million in the first quarter of 2023. Lucid lost $681 million in this year’s first quarter compared to $780 million in the quarter a year ago,

Lucid’s financial situation is such that it will never escape the penny stock category.

Lucid Stock Price Prediction: Where Will It Be in 1 Year

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.