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Is Lucid Motors Stock A Buy Right Now Ahead Of Its Highly Anticipated IPO?

The Lucid Motors IPO is set for Friday, as Churchill Capital Corp. IV prepares to take the luxury electric-vehicle leader public in a highly anticipated debut. Would Lucid Motors stock be a buy right at the IPO?




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Lucid Motors Stock IPO

In February, Churchill Capital IV (CCIV) — a special-purpose acquisition company (SPAC) — announced a deal to take Lucid Motors public, valuing the company at $24 billion. The company is going public “to accelerate into the next phase of our growth,” Lucid Motors CEO Peter Rawlinson said.

A SPAC, also known as a blank-check company, is an alternative to a traditional initial public offering. These blank-check companies have no assets beyond cash. They trade on stock exchanges and then merge with private companies, taking those companies public.

Shareholders will vote Thursday on whether to approve the merger of the blank-check company. If approved, Lucid Motors stock would begin trading Friday under the ticker symbol LCID on the NYSE.


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Lucid Motors Stock Fundamental Analysis: The Lucid Air

Lucid Motors is on pace to start delivering its Lucid Air — a high-performance, ultraefficient luxury EV sedan — in late 2021, according to the company. The company expects to roll out its Gravity performance luxury SUV in 2023. The Lucid Air has not yet started production, but has just completed its preproduction phase.

In a slide deck filed with the U.S. Securities and Exchange Commission July 13, Lucid Motors touted more than 10,000 reservations for the Lucid Air, representing $900 million in anticipated sales. It claimed the Air beats the Tesla Model S and Amazon-backed EV startup Rivian’s R1T in battery efficiency, which it calls the ultimate measure of EV technology. It also claims the Air beats luxury EVs from Jaguar, Porsche and Audi on that metric.

Lucid touts EV technology it developed in-house. It describes the Lucid Air as the “quickest, longest-range, fastest-charging electric car in the world,” delivering 500 miles of range. The Environmental Protection Agency hasn’t certified that range yet. The Air also boasts high-end features such as a “glass cockpit.” The Lucid Air features an autonomous driving system using 32 sensors, including long-distance Lidar, a safety technology that Tesla long avoided.

The first fully loaded Air will cost around $160,000, including federal subsidies. Cheaper versions will be released, with a $70,000 version expected in 2022, according to the Wall Street Journal.

LCID Stock Technical Analysis

LCID stock, currently trading under the SPAC Churchill Capital IV, is trading more than 60% off its highs. Shares could be forming the right side of a deep base, but there is no correct buy point in sight. Keep an eye out for a new base to form, which would offer the stock’s next buy point. Lucid, though, will trade under its own symbol with the IPO.

According to the IBD Stock Checkup, Lucid Motors stock shows a weak 34 out of a perfect 99 IBD Composite Rating. The Composite Rating helps investors easily measure a stock’s fundamental and technical metrics. Weak IBD Composite Ratings are normal for new issues.

Lucid Motors Stock News

On Thursday, Lucid Motors shareholders will vote on whether to approve the merger of the blank check company.

In mid-July, the company said it had finished its preproduction phase after a series of delays. “The testing and validation of Lucid Air is progressing well,” CEO Peter Rawlinson said on the call, according to Bloomberg. “It’s on track for the second half of 2021 start of production for customer deliveries.”

Is Lucid Motors Stock A Buy Right Now?

Churchill Capital stock dropped 2.4% Thursday ahead of the shareholder vote.

Lucid Motors stock is a promising long-term EV stock that is set to start deliveries of its first electric vehicle in late 2021. Shares of Churchill Capital IV, which is taking Lucid Motors public, are far from a proper buy point, so the stock is not a buy right now. Keep a close eye on the stock to see if it builds the right side of a deep base, which would offer a new entry.

Best EV Stocks To Buy And Watch: Nio, Tesla

Among the best EV stocks to buy and watch, Tesla (TSLA) is trading just above its key 50- and 200-day moving average lines. Tesla stock is an IBD Leaderboard idea. Per Leaderboard analysis, “Tesla recently found support at the 40-week line on its weekly chart, and now it’s spending some time above its 10-week moving average. These are encouraging signs.”

Another EV stock to watch is Chinese leader Nio (NIO). Nio stock is forming a deep cup with handle that shows a 55.23 buy point. Shares are about 30% off their 52-week high.

For more leading stocks and stocks approaching buy points, check out these IBD Stock Lists, like the Stocks Near Buy Zones. To see the current stock market trend, check out IBD’s signature daily analysis, The Big Picture.

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