It’s nice to see the Lucid Group, Inc. (NASDAQ:LCID) share price up 12% in a week. But that doesn’t change the reality of under-performance over the last twelve months. In fact the stock is down 45% in the last year, well below the market return.
The recent uptick of 12% could be a positive sign of things to come, so let’s take a lot at historical fundamentals.
Check out our latest analysis for Lucid Group
Given that Lucid Group didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last twelve months, Lucid Group increased its revenue by 3,977%. That’s well above most other pre-profit companies. Given the revenue growth, the share price drop of 45% seems quite harsh. Our sympathies to shareholders who are now underwater. On the bright side, if this company is moving profits in the right direction, top-line growth like that could be an opportunity. Our brains have evolved to think in linear fashion, so there’s value in learning to recognize exponential growth. We are, in some ways, simply the wisest of the monkeys.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Take a more thorough look at Lucid Group’s financial health with this free report on its balance sheet.
A Different Perspective
Lucid Group shareholders are down 45% for the year, even worse than the market loss of 23%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. With the stock down 32% over the last three months, the market doesn’t seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We’ve spotted 2 warning signs for Lucid Group you should be aware of.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Read More: Lucid Group (NASDAQ:LCID) shareholders are up 12% this past week, but still in the red