Why Did Lucid Motors Stock (LCID) Add 20% In 1 Week After Earnings Induced Drop

There has been shifting tides over at Lucid Motors (NASDAQ: LCID), with the electric vehicle manufacturer over the past weeks releasing earnings, dropping 14% on the day, only to have added 20% in the week since, before taking another swing back red, more than 7% yesterday. So what is going on that is driving such a volatile period in LCID stock?

Lucid’s financial performance has become a focal point following earnings, with the firm reporting a substantial loss of $680 million for the first quarter of 2024, juxtaposed against the delivery of 1,967 luxury electric sedans. These results reflect the ongoing challenges Lucid faces as it endeavours to align production with demand and carve out market share within the competitive electric vehicle sector.

The resignation of Mike Bell, its Senior Vice President of Digital also marks a pivotal change within the company's leadership, particularly as Bell has been an integral part of nurturing Lucid's software endeavours since joining the company in 2021.

Mike Bell, whose background includes significant roles at Apple and Intel, brought a wealth of experience in digital innovation to Lucid. During his tenure, he was instrumental in the development of software for the automaker which is currently in the process of scaling production and expanding its product lineup.

Lucid's foray into the luxury electric vehicle market has been met with both excitement and hurdles, as it struggles to establish consistent demand for its Lucid Air model, while advancing the production of its upcoming Gravity SUV.

Stepping into the role temporarily is Derrick Carty, the company's Vice President of Platform Software. Also a former Apple employee, Carty's experience with software platforms will be crucial as he takes on the interim responsibilities. Lucid's reliance on seasoned tech experts highlights the increasing convergence of automotive engineering and digital technology within the industry.

Why The Sudden Shift In Sentiment?

Since the return of ‘Roaring Kitty' sent previous meme stocks soaring, it has been mooted that Lucid stock has been getting some of that retail action and riding the wave. A 20% gain over 1 week, on the back of relatively little news could indicate that this has been the case, with a short squeeze alert having been issued, one of the previously noted targets of the retail community.

Another point of note is that the shares are trading close to 52 week lows, so there is an element that the stock may have sunk as far as markets will let it, to a point of support and a push back against bears. If this were the only factor however, we would have been unlikely to have witnessed yesterday's rapid sentiment shift.

The drop in price yesterday after the rally comes in sync with the big named meme stocks also declining from highs, with GME and AMC both pulling back a little after the amazing ascent that had gripped markets through the early part of the week.

This will be one to watch as the story plays out, and if you are looking for the view of the analyst community, the $3.26 consensus price target remains comfortably 12% above the last close. The high mark of $4, set against the low of $2.9 tells some of the story, but the 7 ‘holds' of the 9 total on file with 1 each in the bull and bear camps potentially indicates a stock that is relatively well priced until the next data comes through.