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Will High Costs Offset Sales in Lucid's (LCID) Q2 Earnings?

·4 min read

Lucid Group LCID is scheduled to release second-quarter 2022 results on Aug 3, after the bell. The Zacks Consensus Estimate is pegged at a loss of 44 cents per share for the quarter. The consensus mark for Lucid’s second-quarter loss per share has been unchanged in the past 60 days.

This electric vehicle company made its NASDAQ debut on Jul 26, 2021. The company released quarterly results thrice after becoming public and incurred a wider-than-expected loss in the third and fourth quarters of 2021. In the last reported quarter, it posted a net loss per share of 5 cents, narrower than the Zacks Consensus Estimate of 30 cents per share. Let’s take a look at how things are shaping up ahead of its second-quarter earnings release.

Lucid Group, Inc. Price and EPS Surprise

Lucid Group, Inc. Price and EPS Surprise
Lucid Group, Inc. Price and EPS Surprise

Lucid Group, Inc. price-eps-surprise | Lucid Group, Inc. Quote

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Lucid this time around as well. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here.

Earnings ESP: Lucid has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate is on par with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: LCID currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors to Note

Customer vehicle production of the company’s first car — Lucid Air — began in the third quarter of 2021. In the first three months of 2022, the company delivered 360 vehicles, increasing triple-fold on a yearly basis. In April itself, LCID delivered more than 300 vehicles as the production is fast ramping up. The company’s deliveries in Q2 are likely to have increased significantly from the last reported quarter, which augurs well for revenue growth.

Additionally, LCID has been successfully passing on the rising cost of raw materials through price hikes, which is expected to have aided revenues. It announced price increases across its Lucid Air volume during the second quarter. As of Jun 1, the new pricing was $154,000 for Grand Touring, $107,400 for Touring, and $87,400 for Pure.

The company is on track to manufacture 12000-14000 vehicles in 2022. It notified in May that customer reservation orders of 30,000 units reflect potential sales of over $2.9 billion. During the quarter-to-be-reported, Lucid inked a deal with the government of Saudi Arabia, per which the latter will purchase up to 100,000 vehicles over 10 years.

On the flip side, though, high operating expenses incurred by Lucid are likely to have played a spoilsport. With the company still in the nascent stage, high technology and product development expenses are likely to have dented margins. Continued spending on capacity expansion of the manufacturing facility in Arizona coupled with the opening of new retail and service locations have been escalating operating costs. In the last reported quarter, selling, general & administrative costs flared up 69.5% year over year. Elevated R&D and SG&A spending is likely to have continued, thereby denting margins.

During the quarter-to-be-reported, Lucid opened its first European studio in Munich. Investment in property and equipment associated with the expansion of production, expansion of retail, delivery, and service capacities along with continued investment in vehicle program development are also likely to have marred cash flows in the quarter-to-be-reported.

What Awaits Its Peers?

Nikola NKLA: Our proprietary model does not conclusively predict an earnings beat for Nikola this time around. Nikola has an Earnings ESP of 0.00% and a Zacks Rank #3. The company is set to report second-quarter 2022 earnings on Aug 4.

The Zacks Consensus Estimate for Nikola’s to-be-reported quarter’s loss is pegged at 27 cents per share. In the last reported quarter, NKLA incurred a loss of 21 cents, narrower than the Zacks Consensus Estimate of a loss of 27 cents.

Rivian Automotive RIVN: Our proven model predicts an earnings beat for Rivian this time around. The EV upstart has an Earnings ESP of +9.58% and a Zacks Rank #3. The company is set to report second-quarter 2022 earnings on Aug 11.

The Zacks Consensus Estimate for Rivian’s to-be-reported quarter’s loss is pegged at $1.67 per share. In the last reported quarter, RIVN incurred a loss of $1.43 a share, narrower than the Zacks Consensus Estimate of a loss of $1.50.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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