Lucid Group Stock Under Pressure After Recent Developments Lucid Group Stock Under Pressure After Recent Developments

By: Alex Freidmen

Lucid Group, Inc. LCID shares are trading lower Friday, and the stock is down nearly 20% over the past five days.

Issues with Model Air Sedans

Lucid is recalling more than 2,000 of its model Air 2022 and 2023 luxury electric sedans due to potentially faulty high voltage coolant heaters (HVCH), responsible for supplying warm air to heating and defrosting systems.

“If an HVCH fails, coolant cannot be heated and the windshield cannot be defrosted. Loss of adequate windshield defrost capability could lead to restricted driver field of vision and an increased risk of a crash,” Lucid said in the recall report filed with the National Highway Traffic Safety Administration on Jan. 10.

Lucid announced its fourth-quarter and 2023 vehicle production and delivery figures on Thursday. The company produced 2,391 vehicles in the fourth-quarter and delivered 1,734 vehicles during the same period. It produced 8,428 vehicles and delivered 6,001 vehicles for the full-year period of 2023.

Lucid is set to announce its fourth-quarter 2023 financial results after the market close on Feb. 21 and will host a conference call at 5:30 p.m. ET the same day. According to estimates from Benzinga Pro, Lucid is expected to report a loss of 30 cents per share and quarterly revenue of $192.629 million.

LCID Price Action: According to data from Benzinga Pro, Lucid shares are down 7.2% at $3.02 at the time of publication.

Image: Lucid Photo by Mike Mareen on Shutterstock


See also  Analysis: Revival Prospects for Beaten-Down Dividend Giants in the DowThe Case For Nike Stock

Founded in 1964, Nike (NKE) is a global sportswear brand with a market capitalization of $130.6 billion. Although the stock has fallen 20.3% year-to-date, it has rebounded by 22% from its 2024 low.

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Nike stock faced a significant drop of about 20% on June 28 following weak fiscal Q4 and FY24 results. The company reported a 1.7% decline in total revenue to $12.61 billion, missing estimates. Despite this, Nike's gross margin for the fourth quarter rose by 110 basis points to 44.7%, surpassing the industry median of 37.24%. The company's profitability metrics like EBITDA and net income margins also outpace sector averages.

However, Nike's weak top-line growth prompted a cost-cutting initiative to reduce expenses by $2 billion. Increasing competition from firms like Deckers Outdoor and On Holding poses a threat to Nike's market dominance. Furthermore, concerns about consumer spending and the economic state in China add to the challenges faced by the company.

Analysts predict a 23.04% year-over-year decline in Nike's earnings and a 4.77% decrease in revenue for fiscal 2025. The stock's price-to-earnings ratio stands at 21.85x, near a decade low, indicating prevailing market pessimism.

Although Nike faces headwinds, recent positive news led to a 6% increase in its shares last Friday.

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