Should you buy Lucid stock? (March 2024)

Published first at: https://www.3minutebreakdowns.com Lucid Group stock analysis. Ticker: $LCID The Lucid AIr is one of the best electric vehicles on the market. However, the company that makes them isn’t doing so well. Lucid stock is down 95% from its all time and just hit $3.17 a share. At that price, Lucid has a market cap of $7.3 billion dollars. With 4.3 billion of cash and investments and 2 billion of long term debt, the enterprise value is 5 billion. The Lucid CFO said that the company’s cash and investments should carry it into “at least 2025”. But that still leaves the company several years away from profitability. Lucid delivered only 6000 cars in 2023, way below the scale it needs to survive. So Lucid still needs to raise billions of dollars to get to a point where it can generate positive free cash flow. But with such a low stock price, that becomes a problem. The more the stock price falls, the more difficult it is for Lucid to raise capital by selling shares. That’s because investors don't want to buy the stock when they know significant share dilution is coming. And based on the current market cap, Lucid probably needs to dilute shareholders by 100% to get the capital it needs to survive. So the lower stock price also causes a vicious cycle. #investing #stocks #stockstowatch #lucidair #3mb