One could be forgiven for having doubts about Lucid Group (NASDAQ:LCID), the electric vehicle maker whose share price has plunged 87% over the past 3 years.
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Yet, despite the steep decline, recent developments suggest there may be some light at the end of the tunnel. Lucid remains on track to manufacture 20,000 vehicles in 2025 – in line with its guidance – and its Q1 2025 net loss of $366 million marks a 46% year-over-year improvement. The company also ended the quarter with a strong liquidity position of $5.76 billion.
Even so, Lucid is still operating at a loss, which means any bullish stance largely hinges on faith in the company’s long-term potential rather than near-term profitability.
That’s where top investor Rick Orford – ranked in the very top 1% of TipRanks’ stock pros – sees an opportunity. He points to two key catalysts on the horizon: Lucid’s strategic partnership with Saudi Arabia and the upcoming launch of the Lucid Gravity SUV. According to Orford, these developments could help shift sentiment and lay the groundwork for future growth and profitability.
“Short-term prospects remain uncertain, but patient investors could benefit significantly if Lucid achieves profitability in the next 3–5 years,” Orford opined.
The investor further highlights just how embedded Lucid is in Saudi Arabia’s EV ambitions. The Kingdom’s sovereign wealth fund holds a majority stake in the company and has committed to purchasing between 50,000 and 100,000 vehicles over the next decade. As Orford sees it, Saudi Arabia views Lucid not just as a financial investment, but as a cornerstone of its broader push to diversify its economy and establish a foothold in the global EV race.
“I’m speculating that they’re using Lucid Motors at least in part to achieve their vision of moving away from oil dependency, which could translate to a huge growth runway for the company,” Orford noted.
The investor is also intrigued by the company’s Lucid’s Gravity SUV, which he believes has the potential to help the company capture market share from Tesla when it becomes available next year. Not only does Gravity’s 420-mile range compare favorably to Tesla’s 244-mile estimates for the Model Y, but the Elon Musk-led company’s reputation is in tatters due to his political activities.
Summing up, the investor believes in the company’s ability to deliver growth going forward – especially for those willing to look further down the road. “I’m rating the stock a ‘Buy’ for its long-term potential,” concludes Orford. “I think investors (buying) at today’s prices will be very pleased.” (To watch Orford’s track record, click here)
Wall Street, however, isn’t quite as enthusiastic. Most analysts are still in ‘wait-and-see’ mode. With 7 Holds outweighing just 1 Buy and 2 Sells, LCID claims a consensus Hold (i.e., Neutral) rating. Meanwhile, the average 12-month price target of $2.54 implies the stock is likely to stay range-bound for the foreseeable future. (See LCID stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.