Lucid stock just crashed to a record low: will it rebound after earnings?

Lucid Group stock price crashed to a record low this week, continuing a downtrend that has been going on for years. It plunged to a low of $6.27, bringing its market capitalization to $2 billion. So, will the downward trend continue ahead of its earnings report on May 5?

Lucid Group stock is crashing despite strong earnings 

LCID stock has been in a freefall for years, a trend that continued after the company announced another dilution earlier this month. It announced that it was raising $1.05 billion from the Public Investment Fund (PIF) and Uber  

As part of this investment, Uber agreed to purchase at least 35,000 vehicles for use for its robotaxi service. It has now invested $500 million in the company.

The company has continued to raise cash over the years to fund its EV rollout. Its most recent results showed that it made a net loss of $812 million in the fourth quarter, bringing its total annual loss to $2.6 billion, slightly lower than the $2.7 billion it lost a year earlier.

The company will continue losing money in the foreseeable future. Data compiled by Yahoo Finance shows that its loss per share will be $7.33 this year followed by $4.2 in the coming year. While this is an improvement, the reality is that it will likely need to raise more capital in the foreseeable future.

On the positive side, analysts anticipate the company’s growth to accelerate because of it Gravity brand. Also, the soaring gas prices will likely push more people to electric vehicles. At the same time, the planned cheaper vehicle will likely lead to more demand.

The average estimate is that its upcoming revenue rose by 57% in the first quarter to $370 million. Its second-quarter revenue is expected to grow by 105% to $533 million. As a result, its annual revenue this year is expected to be $2.2 billion, followed by $4.4 billion next year.

Wall Street analysts have a mixed opinion about the Lucid stock price. Zacks and Weiss Ratings have placed a sell rating, while most of those tracking it have a hold rating. The average estimate among analysts is $13, more than double what it is today. 

The next important catalyst for the LCID stock is its earnings. In some instances, a stock trading at an all-time low can rebound sharply even when it publishes weak numbers because it has been priced in. 

Lucid stock price analysis

LCID stock chart | Source: TradingView

The daily chart shows that the LCID stock has plunged in the past few years and is now trading at a record low. It recently crashed below the key support level at $9.3, its lowest level in January, February, and March this year. 

As a result, it has remained below all moving averages, a sign that bears are in control. It has also become highly oversold as the Relative Strength Index (RSI) and the Aroon Oscillator have fallen. 

Therefore, while the short-term outlook is bearish, a rebound that happens after earnings cannot be ruled out. If this happens, the stock may rebound to the resistance at $9.30.