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Last week, shares of EV start-up Lucid Group, Inc. (LCID) skyrocketed in price. The company’s market value increased to $89.9 billion following the stock’s 24% gain on November 16, after the announcement of increased reservations for its first vehicles. Company management also confirmed that its production plans for 2022 were still on track. However, the company’s fundamentals look weak. For its fiscal third quarter, ended September 30, LCID’s revenue decreased 30.5% year-over-year to $0.23 million. Its net loss and comprehensive loss increased 225.2% from the prior-year quarter to $524.40 million. Furthermore, Wall Street analysts expect a 12-month median price target of $44.33, indicating a 13.3% potential downside.
While LCID doesn’t look sufficiently fit to capitalize on the industry tailwinds, we think it could be wise to invest instead in the stocks of fundamentally strong EV companies NIO Inc. (NIO), XPeng Inc. (XPEV), Li Auto Inc. (LI), and Hyzon Motors Inc. (HYZN).
