‘It’s Now or Never,’ Says Analyst on Lucid Stock (LCID)

Lucid Group (LCID) has been one of the weakest performers in the EV landscape. Shares are down a portfolio-crushing 61% year-to-date. Much of this is justified because the firm has repeatedly missed ambitious growth targets, struggled with supply chain inconsistencies, and continued to post steep losses and heavy cash burn.

Even so, after such a severe selloff, I believe Lucid’s next four quarters represent a potential turning point. Successful execution on new products and partnerships could support a re-rating — but setbacks could pressure the stock further.

Lucid continues to struggle with execution, demand softness, and heavy cash burn, yet the stock has corrected sharply. With major product launches ahead and new partnerships forming, the next year will be critical in determining whether Lucid can stabilize and re-rate higher. I remain Neutral until the company proves consistent improvement in margins, demand, and liquidity.

Q3 Earnings Recap

Earlier this month, Lucid released its Q3 2025 results. The company reported record quarterly revenue of $336.6 million, up 68% year over year, but still below analyst expectations of $352.7 million. While revenue showed improvement, profitability deteriorated sharply. Gross profit of –$334 million missed consensus estimates by a wide margin and represented Lucid’s worst gross profit performance in nine quarters.

Management attributed the weakness to several spillover supply chain issues, including a Q2 magnet shortage, aluminum supply disruptions resulting from a fire at a Novelis plant, and a semiconductor shortage tied to a Nexperia component. These challenges weighed on both production and margins and highlighted the fragility of Lucid’s still-developing supply base.

Some Positive Developments

Despite the disappointing quarter, Lucid did report several meaningful positives. The most important is continued financial support from Saudi Arabia’s Public Investment Fund (PIF), Lucid’s main investor. The PIF expanded Lucid’s loan facility from $750 million to $2 billion, providing enough liquidity to carry the company into the first half of 2027. This significantly reduces near-term bankruptcy risk, a key concern for investors.

Lucid also secured a $300 million investment from Uber (UBER) tied to a multiyear plan to deploy 20,000 robotaxis. In addition, Lucid struck a new partnership with Nvidia (NVDA) to co-develop Level 4 autonomous driving capabilities. While the revenue impact of this collaboration may be years away, the announcement helps strengthen Lucid’s technology narrative and broadens its future optionality.

Gravity Launch and Mid-Size Vehicles: Potential Margin Tailwinds

Lucid’s Gravity SUV remains the company’s most important near-term catalyst. Management noted that Gravity deliveries and orders rose meaningfully in October, and the model is expected to dominate Q4 production. The combination of Gravity and Lucid’s upcoming mid-size vehicle line is expected to improve scale, which could support gross margin recovery as long as the supply-chain disruptions are resolved.

I estimate Q4 gross loss to improve to around $260 million as fixed costs are spread across a larger production base. Sustained margin improvement, however, will depend on consistent volume growth and far fewer operational setbacks.

Cash Burn Still a Major Risk

Lucid’s cash burn remains one of the company’s most worrying issues. The company burned $955 million of cash in Q3, up from $622 million a year earlier. While the recent $875 million issuance of senior convertible debt adds some near-term liquidity, it does not solve the longer-term problem. Consensus estimates project cumulative negative free cash flow of roughly $6 billion from Q4 2025 through 2027.

After repaying part of its 2026 convertible notes and factoring in ongoing losses, Lucid could enter 2027 with little remaining liquidity. This suggests additional financing is likely — and that could mean further equity dilution. I’m ready to be more positive on the stock if the firm demonstrates a clearer (and far more accelerated) pathway to reducing its losses than what it has communicated so far.

Valuation Remains Sturdy Post Selloff

Despite the stock’s severe correction, Lucid is still expensive relative to peers. Its price-to-sales ratio of 3.53 and EV-to-sales ratio of 6.04 remain materially above sector medians of 0.86 and 1.28, respectively. 

Using my proprietary approach of integrating six valuation tools, including EV/Revenue and Price/Sales, I estimate fair value at roughly $20 per share, implying around 57% upside from the current stock price. However, given liquidity risk, execution concerns, and persistent losses, I do not view traditional multiples as reliable indicators of near-term valuation support.

Does LCID Stock Have a Future?

According to TipRanks, the consensus rating on Lucid is Hold, based on 1 Buy, 9 Hold, and 2 Sell ratings. LCID’s average price target is $18.82, implying more than 60% upside over the coming year. Investors should note that the range of estimates varies widely, with high estimates in the $30s and a low-end of around $10 per share.

See more LCID analyst ratings

A High-Risk EV Bet at a Critical Turning Point

Lucid remains a high-risk, high-volatility EV story. The company continues to report sizable losses and faces ongoing challenges in scaling production, yet there are meaningful signs of progress: strengthened liquidity support from the Public Investment Fund, developing partnerships with Uber and Nvidia, and the upcoming launch of the Gravity SUV.

The next four quarters will be crucial. If Lucid can improve margins, stabilize demand, and deliver on its product roadmap, the stock has room for a meaningful re-rating. However, if cash burn persists at its current pace or demand weakens further, the downside risk remains substantial.

Given this mix of potential catalysts and material risks, I’m maintaining a Neutral stance and waiting for clearer proof of a sustainable turnaround.