Key Takeaways
- TD Cowen kept its Hold rating on Lucid Group and cut its price target to $4 from $7 after third-quarter results showed more cash burn than the firm expected.
- Lucid burned $1.04 billion of free cash flow in the third quarter, 30% less than in the second, and a $1.75 billion loan from Saudi Arabia’s Public Investment Fund pays for it into the fourth quarter of 2027.
- The $7 consensus target sits 77% above the price, even as targets and estimates keep falling and the stock trades near its lowest forward sales multiple in five years.
- TD Cowen’s $4 looks closer to the mark, since the money that carries Lucid to its Midsize launch ranks ahead of common shareholders.
Lucid Group (LCID) has lost 78% of its value over the past year. On Tuesday, TD Cowen kept its Hold rating and cut its target to $4 from $7, just 8% above the price. The Street’s consensus target of $7 still sits 77% above it.
Less burn, still plenty of burn
Lucid reported third-quarter results after Monday’s close. Free cash flow came to -$1.04 billion, 30% less than the second quarter’s -$1.48 billion.
Saudi Arabia’s Public Investment Fund (PIF) added $1.75 billion to its loan facility. Lucid says that keeps it funded into the fourth quarter of 2027, through the start of Midsize production.
TD Cowen wanted a smaller burn
TD Cowen called the quarter mixed. It saw signs of progress, but Lucid has used more free cash flow in the second half than the firm expected, and it said the fourth-quarter outlook points to more of the same. Going into the report, analysts’ estimates implied about $968 million of cash burn for the whole second half, and the third quarter alone used $1.04 billion.
TIKR tracks 11 analysts on Lucid. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Lucid, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Lucid’s Analyst Ratings
Does $7 add up?
Not on the trend. The consensus target has fallen from $24 to $7 over the past year:
The high target fell from $70 to $17 over the same stretch.
Analysts still expect Lucid’s revenue to more than double in 2027 and double again in 2028:
That ramp leans on Midsize, which isn’t due to start production until the second half of 2027. And the loss per share analysts expect for 2026 has widened to $9.72 from $9.51 a month ago.
On forward sales, the stock looks cheap:
Lucid trades at 0.6x, right at its five-year low and far below its 10x average. TD Cowen’s $4 target works out to 0.7x, barely above today’s multiple.
Cheap for a reason
The multiple is low because Lucid still spends more to build its cars than it sells them for: its gross margin was -31.3% in the second quarter. And the money that bridges it to Midsize comes from PIF loans and preferred stock that rank ahead of common shares. The preferred alone carried $3.07 billion of liquidation preference at June 30, against a market value of about [$1.5 billion] today. TD Cowen could still prove too harsh if PIF keeps funding Lucid on friendly terms.
Bottom line: TD Cowen’s $4 looks closer to the mark than the Street’s $7, which needs Midsize to arrive on time and make money. Lucid plans to give 2027 guidance and Midsize’s production dates early next year. A firm date, plus funding that doesn’t add more claims ahead of common shareholders, would make $7 look a lot more reasonable.
So what is Lucid stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
