Amid a rally that has pushed the price of electric vehicles (EV) manufacturer Lucid Motors (NASDAQ: LCID) stock by nearly 25% across the previous week and left experts wondering about what triggered this bullish push, many stock traders and investors are wondering whether Lucid is a buy.
Indeed, Lucid soared 27% on Monday, adding up to the 24.04% gain over the week, albeit slowing down in the past day, during which it has lost 2.31% and is still unable to fully reverse the last month’s losses that currently stand at 18.55%. So, is Lucid stock a buy right now?
RBC: ‘Hold your horses’
While the reasons could be the major Tesla (NASDAQ: TSLA) recall in Australia and Lucid’s recent announcement on a three-year materials agreement with Ma’aden Rolling, a producer of aluminum sheets and a subsidiary of the government-owned Saudi Arabia Mining Co., some are cautious.
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Among the skeptics is RBC’s stock analyst Tom Narayan, who voiced his opinion that the company was facing an uphill struggle to bring back investors, particularly against the backdrop of an underwhelming Q4 2023, during which Lucid delivered 1,734 vehicles, significantly below the Q4 2022 mark at 1,932.
With this in mind, Narayan believes that “Lucid is demand constrained, not supply constrained,” adding that the manufacturer is experiencing challenges related to low brand awareness and modest customer base expansion, limiting its potential despite product superiority.
Lucid stock price analysis
At the same time, the analyst’s views do not differ from those of his colleagues, who have jointly declared LCID a ‘hold’ with seven voices and one even suggesting a ‘sell.’ That said, their projections for the next 12 months envision an average price target of $5.14, representing an increase of 52.07%.
Overall, Lucid’s recent rally is impressive, so it is understandable that the ‘fear of missing out’ (FOMO) might prevail among some investors. However, considering its previous price activity and underperformance compared to the rest of the market and automobile industry, its long-term trend remains negative.
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