Lucid Motors Was Once a Hot EV Stock. Now Morgan Stanley Warns That the Flames Are Freezing Over.

Core Viewpoint - Lucid's shares are experiencing significant declines, yet its valuation is positioned at 3.16 times sales, which is higher than peers but lower than its historical average, indicating a precarious balance between diminishing hype and potential recovery [1] Financial Performance - Lucid reported Q3 revenue of $336.6 million, a 68% year-over-year increase, but incurred a per-share loss of $3.31, which, while narrower than the previous year's loss of $4.10, was still wider than Wall Street expectations [7] - The company's cost of revenue nearly doubled its revenue, leading to a gross loss margin near 100%, resulting in a $942 million operating loss for the quarter and pushing nine-month operating losses beyond $2.4 billion [8] - Despite losses, Lucid ended the quarter with $5.5 billion in liquidity, including a steady cash level of $1.6 billion, which is expected to sustain operations into the first half of 2027 [9] Production and Deliveries - Lucid achieved its seventh consecutive quarter of record deliveries, handing over 4,078 vehicles, a 47% increase year-over-year, with production hitting 3,891 units, a 116% rise from the previous year [10] - However, the company trimmed its annual production guidance to approximately 18,000 units and slightly reduced capital expenditure guidance [10] Strategic Developments - Lucid secured an expansion of its delayed-draw term loan facility from Saudi Arabia's Public Investment Fund, increasing it from $750 million to nearly $2 billion, and received a $300 million strategic investment from Uber [11] - The company is also laying groundwork for a 2026 autonomous rollout in San Francisco by delivering vehicles to Nuro's robotaxi engineering fleet [12] Analyst Sentiment - Analyst Andrew Percoco downgraded Lucid to "Underweight" and cut the target price to $10, citing challenges such as dilution risks, delayed profitability, and a steep road ahead [5][15] - The consensus rating for Lucid stock is "Hold," with one "Strong Buy," eight "Hold," one "Moderate Sell," and two "Strong Sell" recommendations among 12 analysts [17]