TLDR
- Two Sigma Investments LP increased its stake in Lucid Group by 4,320.7% in Q4, now owning 15.85 million shares worth $47.87 million
- Lucid stock recently rose 30% in 30 days, trading at $2.77
- The company released its second model (Gravity SUV) earlier this year after years of development
- Analysts expect 73% sales growth in 2025 and 96% growth in 2026
- Risks include low cash reserves, recent CEO departure, delayed mass market models, and high valuation
Lucid Group, the electric vehicle manufacturer, has seen a flurry of activity surrounding its stock in recent weeks. Two Sigma Investments LP has made a massive bet on the company, increasing its stake by over 4,300% according to recent SEC filings. At the same time, the stock has climbed 30% in the past month despite facing several challenges.
Two Sigma Investments LP now owns approximately 0.53% of Lucid Group after acquiring an additional 15.49 million shares during the fourth quarter. The investment firm’s position is valued at nearly $48 million based on the filing.
This move comes as Lucid’s stock has shown renewed vigor in the market. Shares have jumped nearly 30% in value over the last 30 days, closing at $2.77 on Wednesday after dropping 6.4% in the day’s trading.
The stock experienced heavy trading volume with over 143 million shares changing hands, more than double its average volume of about 69.5 million shares.
Lucid has faced a rocky road since going public. The company’s stock has traded between $1.93 and $4.43 over the past 52 weeks, showing the volatility that has characterized its market performance.
From Concept to Production
Lucid’s journey has been lengthy. Originally founded in 2007 under the name Atieva, it took nearly 15 years for the company to progress from concept stage to mass production of its first model.
The Lucid Air sedan began shipping to customers in late 2021, causing the company’s sales to surge from essentially zero to around $750 million. However, growth soon plateaued.
For drivers looking to secure the most efficient EV currently stalking US roads, look no further than the 2025 Lucid Air Pure RWD. The Air is the first model offered by new EV force #LucidMotors, and takes the shape of a luxury executive sedan @Tesla2Lucid pic.twitter.com/sCD4Cx0q7J
— Lucid 🚀🚀 (@rocckosw23) January 27, 2025
With a starting price of around $70,000 that can exceed $100,000 with options, the Air model targets a limited market segment. After several years of production, Lucid had largely saturated its potential buyer base.
Earlier this year, Lucid released its second model – the Gravity SUV platform – after years of development. Early demand appears promising, though challenges remain.
Today marks an exciting landmark for our company. Production of the Lucid Gravity is now underway at our factory in Arizona!
This milestone is a celebration of the hard work by our passionate and dedicated team to bring this groundbreaking SUV to life. Its combination of space… pic.twitter.com/ItJsOL3H3Y
— Lucid Motors (@LucidMotors) December 5, 2024
Growth Expectations and Challenges
Analysts project strong growth for Lucid, with expectations of 73% sales growth in 2025 and an additional 96% growth in 2026. These projections are largely driven by anticipated rising sales of the Gravity SUV.
In its most recent quarterly report, Lucid posted revenue of $235.05 million, falling short of analyst expectations of $250.50 million. The company reported a loss of $0.24 per share, slightly worse than the expected loss of $0.23.
Despite missing estimates, revenue was up 36.1% compared to the same period last year.
The company faces several key challenges. Cash reserves have dwindled to less than $1.9 billion, while last year’s net losses exceeded $2 billion. This financial situation may force management to issue more shares, potentially diluting existing shareholder value.
Adding to uncertainty, Lucid’s longtime CEO recently departed the company.
Perhaps most importantly, Lucid’s biggest growth opportunity won’t materialize until 2027, when several new mass-market models are scheduled to begin production. These affordable options could dramatically expand Lucid’s customer base.
The stock currently trades at nearly 9 times sales, suggesting investors are already pricing in substantial future growth.
Wall Street remains cautious on Lucid’s prospects. The company has a consensus rating of “Hold” among analysts, with an average price target of $2.68. Two analysts rate the stock as a “sell,” eight as a “hold,” and two as a “buy.”
Cantor Fitzgerald recently reiterated a “neutral” rating with a $3.00 price target, while Benchmark maintained a “buy” rating with a $5.00 target.
The company has a market capitalization of $8.45 billion, with a price-to-earnings ratio of -2.07 and a beta of 0.88. Its debt-to-equity ratio stands at 0.77, with a quick ratio of 3.26 and a current ratio of 3.71.
Two Sigma Investments’ massive position increase signals some institutional confidence in Lucid’s future, even as the company navigates through its current challenges.
