Lucid Group (LCID 5.20%) is expected to have a terrific year when it comes to sales growth. Analysts expect revenue to nearly double in 2025. And with several new mass market models on the way, we could see this growth trajectory persist for years to come.
It will be critical to track Lucid's actual revenue. But that's not the only number I'm keeping an eye on.
NASDAQ: LCID
Key Data Points
These metrics are critical to Lucid's future
Due to the recent introduction of its Gravity SUV platform, as well as the future launch of more affordable electric vehicles, Lucid is experiencing a phase of heavy top-line growth. That's great news for investors. But as a company yet to reach profitability, this growth comes at a cost. Lucid's cash balance is far below that of peers like Tesla and Rivian.
Its gross margins, meanwhile, remain deeply negative, meaning that it loses money on every car it sells. Its total number of shares outstanding has also ticked up in recent quarters, suggesting that the company is turning to dilution in order to remain solvent.
RIVN Cash and Equivalents (Quarterly) data by YCharts.
There's no doubt that Lucid is a promising company when it comes to sales growth. But it's running out of time when it comes to liquidity and access to capital. The company generated negative free cash flow of $3 billion last year, with that cash burn accelerating toward the end of the year. Expect Lucid to tap markets again this year for additional funding, diluting shareholders in the process.
If investors don't see gross margins pick up considerably -- something both Rivian and Tesla have been able to do over the years -- they may see Lucid dilute shareholders to fund its aggressive revenue growth. The end result may be a poor performance for the stock price, even if sales do grow immensely in the years to come.
