The Story of Lucid’s Stock Exchange: From Overpriced Hype to Undervalued Opportunity?

For many reasons, the view of the electric luxury car manufacturer Lucid Motors (NASDAQ:LCID) has improved significantly in recent months. First, there’s a lot to like about the upcoming Gravity SUV, including its unique seven seats and overall looks. Meanwhile, Lucid should benefit from it of Tesla (NASDAQ:TSLA) many problems, while Lucid’s stock valuation has been extremely low after the stock tumbled over the last year. Finally, I believe that the media is more excited about the automaker and its EVs, doing well for its financial results in the long run.

However, the stock’s valuation remains high, and the automaker still has to successfully produce, launch and sell the Gravity to show it can survive and thrive.

With these points in mind, I continue to recommend that investors sell LCID shares until the automaker’s outlook is further confirmed.

A Promising SUV

Unlike most SUVs, some Gravity EVs that Lucid will make it will consist of three row row, enabling it to transport seven adults comfortably. At the same time, Car and Driverthat drove the SUV model, praised its space, its smooth ride, and its design.

The EV, due to go on sale later this year, also has 8 cubic feet of “frunk” – front cargo space – together with big trunk. Also important, Gravity it is expected to have range of 440 miles, with more than 800 horse power. Lucid says it will be able to accelerate from 0 to 60 miles per hour in less than 3.5 seconds. The exterior of the EV looks attractive and well-designed, while its interior is also easy on the eyes.

Finally, Gravity starting price is expected to be less than $80,00, putting it on par with Tesla’s Model X and of Rivian (NASDAQ:RIVN) R1S making it about $20,000 cheaper than Mercedes’ EQ SUV.

As a result, the EV is competitive on price, unlike its current offering, the Lucid Air sedan, which starts at $70,000, making it more expensive than Tesla’s Model 3 and. of Volkswagen (OTCMKTS:VWAGY) ID. 4.

Considering the high popularity of SUVs in America, the unique position of Gravity and its competitive price, I believe that it will be more popular than Lucid Air.

Tesla Issues with Lucid’s Undervaluation

Tesla’s recent problems, such as the Cybertruck’s accelerator pedal issues, have received a lot of coverage. Additionally, Tesla’s declining sales and price cuts have been closely covered.

Given the large amount of negative coverage Tesla is getting, as well as CEO Elon Musk’s controversial comments, I expect the market share of all its EVs to decline going forward. That shortfall should create an opportunity for Lucid to attract more buyers.

On the valuation front, LCID shares he has gone back 42% so far in 2024 and 65% in the last year, making its market capitalization even smaller than before and causing its valuation to be very small.

However, the stock is still changing hands at a high trading value to earnings ratio of 7.1 times.

Increasing Buzz and the Bottom Line on Lucid Stock

The media seems more excited about Lucid’s outlook now than it has been for the past few years.

In addition to being generally happy about Gravity, for example, Newsweek recently identified Lucid, along with Rivian, as two EV startups that had been able to do well enough to continue working on new, promising EVs. Additionally, the publication praised the 516-mile range of the Grand Touring version of the Lucid Air, a feat Lucid achieved last year.

According to Newsweek, the vehicle now has the longest range of any EV in America. In years past, the mainstream media generally did not publish such glowing reports on Lucid. And as I said before, reviews of Gravity have generally been very positive.

The Gravity looks promising, Lucid can capitalize on Tesla’s problems, and the media seems more enthusiastic about the company.

Due to the last points, I expect Lucid’s financial results to improve even more in the long term. Still, given the company’s need to execute Gravity well and Lucid’s still-elevated stock valuation, I recommend that investors stay on the sidelines for now when it comes to Lucid.

At the date of publication, Larry Ramer held a long position in RIVN. The opinions expressed in this article are those of the author, in accordance with InvestorPlace.com’s Publishing Guidelines.