Written by Brenda Nakalema

Lucid stock is dropping owing to low production

EV startup Lucid released its fourth-quarter numbers on Monday evening. Its first-quarter saw the company post impressive sales. However, it …

EV startup Lucid released its fourth-quarter numbers on Monday evening. Its first-quarter saw the company post impressive sales. However, it appears that posting millions of dollars in sales wasn’t nearly enough as shares continue to fall in after-hours trading due to low levels of production.

Lucid (ticker: LCID) stock gained 10% in Monday’s trading session- a remarkable feat for the company considering that the S&P500 and Dow Jones Industrial Average dropped about 0.2% and 0.5%, respectively.

Shares are down roughly 14% in late trading to $25.06. Both sales figures and guidance disappointed previously excited investors. Lucid reported a loss of 64 cents per share on sales of $26.4 million in the quarter. Wall Street expectations stood at a loss of 35 cents on sales of $37 million.

The Street was expecting Lucid to ship roughly 250 cars in the fourth quarter of 2021. The company only managed to secure about half that figure. Despite this, investors might not be too turned off by the sales figures, especially since the company only started delivering its Air sedan late last year. Aside from this, Adam Jonas, a Morgan Stanley analyst, said that investors were expecting weak sales postings from the company.

What really has investor’s attention is the outlook for 2022 deliveries. Wall Street analysts expect the company to deliver roughly 20,000 cars this year, which would generate sales of over $2 billion. Lucid announced production of 12,000 to 14,000 cars is the most probable outcome.

At the moment, customer reservations stand at roughly 25,000- a significant increase from the 13,000 earlier reported in November. There’s no telling how Lucid stock will react on Tuesday. The fourth quarter of 2021 is only the second quarterly report since the company went public via a merger with a special-purpose acquisition company or SAPC. Shares traded at 24% the following day after the company’s third-quarter report in mid-November.

Investors should always be prepared for that level of volatility. Options markets typically mean shares will rise or fall about 13% after fourth-quarter earnings.

Coming into Monday trading, Lucid stock had dropped 31% year to date. Factors such as inflation, rising interest rates, and the Russian- Ukraine conflict all dampened investor enthusiasm for new, fast-growing companies.