LCID Shares Fall More Than 60% in a Year: How to Play Now

Core Insights - Lucid Group (LCID) is currently trading at a discount compared to its peers, with mixed fundamentals following a challenging year [1] - The Gravity SUV is positively impacting the product mix, but issues with margins and cash burn remain significant concerns [1] - Management's ability to execute on deliveries, cost management, and capital allocation will be crucial for narrowing the performance gap with peers by 2026 [1] Stock Performance - LCID stock has declined over 60% in the past year, underperforming the industry and broader market, which saw increases of approximately 15% and 12% respectively [2] - The S&P 500 index rose about 20% during the same period [2] Delivery and Production - Lucid achieved record deliveries of 15,841 vehicles in 2025, marking a 55% year-over-year increase, driven primarily by the Gravity SUV [5][12] - In contrast, competitors like Rivian and Tesla experienced declines in deliveries during the same period [12] Financial Position - A larger delayed-draw term loan facility and a strategic investment have extended the company's cash runway into the first half of 2027, allowing time for the Gravity SUV and midsize program to scale [6] - LCID's valuation stands at approximately 1.57x forward twelve-month sales, significantly lower than the sub-industry average of 3.28x and the S&P 500's 5.25x [7] Profitability and Margins - Despite the increase in deliveries, Lucid continues to face deep negative margins due to supply chain costs and tariffs, which are pressuring profitability [5][14] - The company is expected to see revenue growth through 2026 as the Gravity SUV and other models expand the addressable market [13] Future Outlook - The upcoming Atlas powertrain and collaborations aimed at achieving Level 4 autonomy could enhance unit economics and product appeal if executed on schedule [13] - The focus remains on improving profitability and cash generation, with any progress in cost management or tariff relief being critical for future valuation [14] Investment Sentiment - Lucid currently holds a Zacks Rank of 4 (Sell) and a VGM Score of F, indicating potential underperformance in the near term [9] - The company is set to report Q4'25 results on February 24, 2026, with key areas of focus including the ramp-up of the Gravity SUV and commentary on delivery, production, and capital expenditures [15]