This year is expected to be a challenging one for the electric vehicle (EV) industry due to growing supply chain issues and rising production costs amid 40-year high inflation rates. Furthermore, because the Fed is set to raise interest rates this month…
the borrowing costs for EV companies are expected to rise substantially, further raising the sector’s production costs.
Also, EV manufacturers are facing difficulties in sourcing sufficient semiconductors and supplies amid the global chip shortage. The bearish sentiment surrounding the electric vehicle industry is evidenced by the Global X Autonomous & Electric Vehicles ETF’s (DRIV) 13% decline year-to-date.
Given these factors, we think it advisable to avoid fundamentally bleak electric vehicle stocks Lucid Group, Inc. (LCID – Get Rating), NIO Inc. (NIO – Get Rating), XPeng Inc. (XPEV – Get Rating), and Fisker Inc. (FSR – Get Rating).
LCID in Newark, Calif., is a technology and automotive company that develops electric vehicle (EV) technologies. The company designs, engineers, builds, and markets electric vehicles, EV powertrains, and battery systems. It operates more than 20 retail studios in the U.S.
Last December, LCID was investigated by Schall Law Firm, a national shareholder rights litigation firm, on behalf of investors of LCID for alleged violations of the securities laws. This investigation focused on whether the company issued false and misleading statements or failed to disclose information relevant to investors.
In its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, LCID’s total costs and expenses increased 151.8% year-over-year to $512.08 million. Its loss from operations grew 143.2% year-over-year to $485.68 million. LCID’s adjusted EBITDA declined 54.1% year-over-year to a negative $299.58 million, and the company’s net loss and comprehensive loss rose 235.9% year-over-year to $1.05 billion.
LCID is relatively overvalued compared to its peers. In terms of forward EV/Sales, LCID is currently trading at 28.42x, which is 2,151.2% higher than the 1,26x industry average. Its 8.30 forward Price/Book multiple is 188.3% higher than the 2.88x industry average. And its12.57 forward Price/ Sales ratio compares with the 1.03 industry average.
The Street expects LCID’s loss per share to amount to $0.27 for its fiscal 2022 first quarter, ending March 31, 2022.
The stock declined 40.5% in price year-to-date and 7.3% over the past year. LCID closed yesterday’s trading session at $22.63.
LCID’s POWR Ratings are consistent with this bleak outlook. The company has an overall F rating, which translates to Strong Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
LCID has an F grade for Value, Quality, Stability, and Sentiment. Within the F-rated Auto & Vehicle Manufacturers industry, it is ranked #63 of 69 stocks.
To see LCID’s POWR Ratings for Growth, and Momentum, click here.
NIO designs, develops, manufactures, markets, and sells smart electric vehicles in China. It is headquartered in Shanghai, China. The company offers electric SUVs, smart electric sedans, energy and service packages, power solutions, repair, maintenance, bodywork services, courtesy car services, insurance services, and auto financing services.
On Jan.31, 2022, NIO completed its repurchase offer for its…
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