Lucid (LCID 4.24%) stock is climbing in Monday's daily session. The company's share price was up 3% as of 11:30 a.m. ET, according to data from S&P Global Market Intelligence. Meanwhile, the S&P 500 index was up 0.3% and the Nasdaq Composite index was up 0.5%.
Lucid stock rocketed out of the gate to start today's trading and had been up as much as 9.2% earlier in the session. The big move appears to have primarily been driven by bullish momentum for the broader market, but a recent recall announced by Tesla may also have been a significant factor.
NASDAQ: LCID
Key Data Points
Late last week, Tesla announced that it would be recalling 4,382 Model 3 and Model Y vehicles in Australia due to a software problem that could affect the steering wheel. This news came not long after Lucid announced it would be recalling more than 2,000 of its Lucid Air vehicles due to concerns they may have faulty high-voltage coolant heaters and suffered big sell-offs.
Some investors may be interpreting the EV industry leader's recent recall as a sign that Lucid's own recall was not out of the ordinary. Either way, Lucid stock has bounced off the record pricing low that it hit last Friday.
Is Lucid stock a smart buy right now?
On the heels of bearish indicators for demand in the EV industry, Lucid stock hit an all-time low of $2.54 per share last Friday. Today's gains are a welcome reversal on recent trading. While it's certainly possible that the stock will continue to enjoy some strong rebound momentum, the long-term outlook for the business is still fraught with uncertainty.
In the third quarter, Lucid posted an operating loss of approximately $752.9 million on revenue of $137.8 million and vehicle deliveries of 1,457. The company won't publish its fourth-quarter results until after the market closes on Feb. 21, but it has announced that it produced 2,391 vehicles and delivered 1,734 vehicles in the period. While the sequential quarterly increase in vehicle deliveries is encouraging, there's a good chance it will be accompanied by an increased operating loss.
LCID PS Ratio (Forward) data by YCharts
Lucid stock now trades at roughly 4.8 times this year's expected sales and 1.7 times next year's expected revenue. Analysts expect the company's sales to increase rapidly, but wavering EV demand could complicate the business trajectory, and profitability likely remains years away even under optimistic conditions. While it's possible that the stock could deliver explosive returns, it remains very high risk and won't be a suitable fit for most investors.
