Lucid Group Shares Experience Significant Volatility
Shares of Meid Group (NASDAQ: LCID) closed down 13.8% on Friday. It’s a bit confusing because, well, the news wasn’t really all that great.
This morning, analyst Andres Shepherd from Canter Fitzgerald raised his price target for Lucid’s stock from $3 to $20. On the surface, this might imply he’s become much more optimistic—like seven times more. But, frankly, there’s something quite off about this assessment.
If you remember, last month Lucid executed a reverse stock split, where shareholders exchanged ten “old” shares for one “new” share. Back then, the stock was valued at around $2 each, and Shepherd’s prior target was at $3.
With the reverse split in place, the new shares are now priced at $18. So, Shepherd’s fresh target of $20 suggests that the shares are expected to rise by less than 10% over the next year.
This actually represents a sort of downgrade. But surprisingly, investors seem to be showing interest in Lucid’s stock today.
Now, it’s important to note that Shepherd still believes Lucid’s stock could increase—just not by much. He rates it as “neutral,” though one might argue that “sell” would make more sense.
Why? Well, for starters, Lucid has yet to turn a profit. Most analysts think it could take until 2031 before they finally do. Meanwhile, the company is burning through nearly $3 billion in cash each year, leaving them with just a fraction of that right now.
All this points to a rather bleak outlook as we approach 2031. It’s hard to find much to be excited about here.
So, if you’re considering an investment in Lucid Group, it’s worth pausing for a moment.
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