Exchange: NASDAQ | Sector: Consumer Cyclical | Industry: Auto Manufacturers
Q1 2024
Published: May 6, 2024
Earnings Highlights
Revenue of $172.74M up 15.6% year-over-year
EPS of $-0.30 increased by 30.2% from previous year
Gross margin of -134.3%
Net income of -680.86M
"'We have sales momentum, a compounding efficiency advantage, unprecedented interest from consumers and corporate partners, more than $5 billion in total liquidity, and Gravity, which I believe is on track to become the world's best SUV.' - Peter Rawlinson" - Peter Rawlinson
Lucid Group Inc (LCID) Q1 2024 Financial Results & Analysis: Navigating Growth in Luxury EV Market
Executive Summary
Lucid Group Inc reported its first quarter 2024 results, noting a substantial performance enhancement particularly in production and deliveries amidst a demanding macroeconomic environment. The company produced 1,728 vehicles and delivered 1,967—representing a significant year-over-year increase of 39.9%. Despite a GAAP net loss of $680.9 million, Lucid's management is optimistic about future profitability, driven by strategic partnerships and anticipated efficiency from the upcoming Gravity SUV. The firm's liquidity position remains robust, with $5.03 billion in total cash and cash equivalents, enabling it to navigate through significant upcoming capital expenditures for its new vehicle programs.
Key Performance Indicators
Revenue
172.74M
QoQ: 9.92% | YoY:15.60%
Gross Profit
-232.06M
-1.34% margin
QoQ: 8.23% | YoY:33.90%
Operating Income
-729.92M
QoQ: 0.94% | YoY:5.47%
Net Income
-680.86M
QoQ: -4.14% | YoY:12.66%
EPS
-0.30
QoQ: -3.45% | YoY:30.23%
Revenue Trend
Margin Analysis
Key Insights
**Revenue:** $172.7 million, a 9.9% increase sequentially and a year-over-year growth of 15.60%.
**Gross Profit:** A loss of $232.1 million, less negative than prior periods showing gradual improvements in gross margin efficiency.
**Operating Income:** $-729.9 million, reflecting ongoing investment in technology and infrastructure.
**Net Income:** $-680.9 million; while the loss is substantial, it was considered strategically necessary for scaling.
**Cash Position:** Ended the quarter with $2.12 billion in cash and short-term investments, a healthy current ratio of 4.66, indicating strong liquidity.
Financial Highlights
### Financial Highlights:
- Revenue: $172.7 million, a 9.9% increase sequentially and a year-over-year growth of 15.60%.
- Gross Profit: A loss of $232.1 million, less negative than prior periods showing gradual improvements in gross margin efficiency.
- Operating Income: $-729.9 million, reflecting ongoing investment in technology and infrastructure.
- Net Income: $-680.9 million; while the loss is substantial, it was considered strategically necessary for scaling.
- Cash Position: Ended the quarter with $2.12 billion in cash and short-term investments, a healthy current ratio of 4.66, indicating strong liquidity.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
172.74M
15.60%
9.92%
Gross Profit
-232.06M
33.90%
8.23%
Operating Income
-729.92M
5.47%
0.94%
Net Income
-680.86M
12.66%
-4.14%
EPS
-0.30
30.23%
-3.45%
Key Financial Ratios
currentRatio
4.66
grossProfitMargin
-134.3%
operatingProfitMargin
-423%
netProfitMargin
-394%
returnOnAssets
-7.65%
returnOnEquity
-14.4%
debtEquityRatio
0.51
operatingCashFlowPerShare
$-0.22
freeCashFlowPerShare
$-0.31
priceToBookRatio
1.39
priceEarningsRatio
-2.42
Net Income vs. Revenue
Expense Breakdown
Management Commentary
### Management Insights:
- Production and Deliveries: CEO Peter Rawlinson emphasized that operational decisions are geared towards sustainability and growth. 'Our 1,967 deliveries were a strong indication of our momentum and brand appeal, affirming a 40% growth trajectory in a competitive market.'
- Liquidity & Investments: CFO Gagan Dhingra noted ongoing cost optimization: 'We are focused on managing our capital expenditures, with a projected $1.5 billion for 2024 to support upcoming vehicle launches.'
- Strategic Partnerships: The CEO praised the Public Investment Fund (PIF) partnership, stating, 'Their confidence and continued investment form a cornerstone of our strategy to expand in new markets like Saudi Arabia, crucial for achieving our Vision 2030 goals.'
'We have sales momentum, a compounding efficiency advantage, unprecedented interest from consumers and corporate partners, more than $5 billion in total liquidity, and Gravity, which I believe is on track to become the world's best SUV.' - Peter Rawlinson
— Peter Rawlinson
'Our stock-based compensation was $63.7 million indicating strategic retention and growth initiatives. We aim to improve efficiency and reduce costs in upcoming quarters.' - Gagan Dhingra
— Gagan Dhingra
Forward Guidance
Looking forward, Lucid Group anticipates a production forecast stable at around 9,000 vehicles in 2024, with management expecting gradual improvements in gross margin as product deliveries ramp up. The forthcoming Gravity SUV is a critical component, anticipated for production startup later this year, promising to significantly expand Lucid's addressable market from 2025 onwards. Ongoing efforts in cost efficiency tied to additional vehicle technologies and production scaling are also set to support future profitability.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
LCID Focus
-1.34%
-4.23%
-14.40%
-2.42%
NIO
4.92%
-54.40%
-25.50%
-3.26%
XPEV
12.90%
-25.10%
-3.89%
-9.64%
F
8.71%
2.95%
3.11%
9.93%
TSLA
17.40%
5.50%
1.75%
123.62%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Lucid Group's investment thesis hinges on its ability to capitalize on the growing luxury EV market while strategically managing production scaling and costs. The clear path towards profitability requires efficient launching of new models and maintaining robust liquidity through partnerships. While competitive pressures are notable, Lucid's unique technology and growing brand recognition provide a favorable outlook for long-term investors.
Key Investment Factors
Growth Potential
Lucid's entrance into the SUV market with the Gravity model represents a potential 6x expansion in its total addressable market, targeting buyers beyond the luxury segment. Additionally, the midsized vehicle launching in 2026 aims to capture more price-sensitive consumers, further enhancing growth prospects.
Profitability Risk
The company's high cash burn rate, projected at substantial over $1 billion annually, poses a risk if sales do not continue to grow as anticipated. The EV market volatility alongside competition may also affect pricing strategies and market share.
Financial Position
Despite current negative profitability with a net income loss of $680.9 million, the company maintains a solid liquidity position with $5.03 billion total cash. Current ratios indicate a healthy balance sheet capable of covering short-term liabilities.
SWOT Analysis
Strengths
Strong liquidity with over $5 billion available cash and investments
Partnership with PIF enhances funding and market expansion opportunities
Recognized for superior vehicle efficiency and range in the EV market
Weaknesses
Continued heavy losses indicate significant ongoing spending without immediate returns
Production capacity constrained compared to market demands
Operating income concerns due to high fixed costs from infrastructure investments
Opportunities
Rising demand for electric vehicles supports growth ambitions
Upcoming Gravity SUV poised to capture a larger share of the SUV market
Potential expansion of technology partnerships with traditional automakers
Threats
Significant competition from established automotive manufacturers and emerging EV brands
Macroeconomic conditions affecting consumer spending on luxury goods
Potential supply chain disruptions that could affect production and delivery