The stock market was off to a strong start on Thursday morning, as Wall Street got itself into a better mood following some recent declines. Even as fears about rising interest rates continue to swirl around the market, investors still aren't convinced that things won't work out just fine for the U.S. economy in the long run. The Dow Jones Industrial Average (^DJI +0.02%) had risen half a percent as of 10 a.m. ET today.
Even as the overall market rose, though, some stocks missed out on the rally. Lucid Group (LCID +4.79%) has done a good job of finding an initial niche in the electric vehicle (EV) industry, but its most recent financial results that it just announced gave shareholders some pause about what its competitive position is likely to be.
Meanwhile, another stock, Domino's Pizza (DPZ 2.72%), found itself on the outs with investors as well. You'll find all the details you want below.
Lucid can't hit the gas
Shares of Lucid Group fell 16% early Thursday. The EV company has generated some excitement among investors, but its execution hasn't been swift enough in some people's eyes to justify a high stock price.
Lucid's financial numbers for the fourth quarter of 2022 showed that it still has a long way to go to reach its full potential. Revenue of $258 million was up nearly tenfold from year-ago levels, although it was somewhat less than most shareholders had anticipated.
Rising costs produced a wider operating loss, though, and most of the narrowing of its net losses came from adjustments that stemmed from the poor performance of Lucid's stock price. Even incorporating those expectations, losses of $0.28 per share for the quarter were worse than expected.
NASDAQ: LCID
Key Data Points
The big problem Lucid faces is its slow ramp-up in production. The EV maker produced nearly 3,500 vehicles in the fourth quarter, but delivered just 1,932 of them.
Moreover, although total 2022 production of 7,180 vehicles came in above Lucid's reduced guidance for between 6,000 and 7,000 for the year, the automaker now expects to make just 10,000 to 14,000 EVs in 2023. That was disappointing for a company that had at one point seen itself building 20,000 vehicles a year.
Lucid's luxury status and high price point give it the ability to become profitable even without huge sales volume. Yet customers won't wait forever, and with more than two years' worth of reservations at projected manufacturing rates, Lucid is betting a lot on the loyalty of prospective customers waiting in line for its vehicles.
The next Domino to fall
Meanwhile, shares of Domino's Pizza dropped 9% early Thursday. The pizza chain giant reported fourth-quarter financial results that weren't able to live up to the high standards that shareholders have developed over time.
The quarterly figures from Domino's showed signs of strain among consumers. Global retail sales declined 1.1% year over year in the fourth quarter, with weakness in foreign currencies versus the U.S. dollar accounting for the entire decline, and then some.
But U.S. same-store sales were up just 0.9% for the quarter and actually fell 0.8% over the full 2022 fiscal year. Nevertheless, revenue climbed 3.6% year over year, net income inched higher by 1.7% to $158 million, and a reduced share count helped boost adjusted earnings to $4.43 per share.
NASDAQ: DPZ
Key Data Points
However, investors weren't comfortable with all the challenges Domino's faces right now. High costs of raw ingredients have plagued much of the restaurant industry, but Domino's has also had a tough time finding delivery drivers. That has eaten into its customer service reputation, as a lack of drivers can lead to longer waiting times that in turn discourage customers from ordering.
Domino's has impressed many investors with its long-term success, and embracing digital technology has also helped drive performance. Without signs of continued upward momentum in its business, though, Domino's stock might be more expensive than it's worth, for now.
