Tesla vs. Lucid Stock: Which Is a Better Investment?
Written by
Yaël Bizouati-Kennedy
Edited by
Nicholas Morine
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Tesla and rival Lucid operate in very different ways — and while Tesla used to top the electric vehicle (EV) landscape, things have recently changed in this very competitive field. This shift is partly due a lackluster Tesla delivery report earlier this month, which placed downward pressure on its stock price.
Let’s look at the stocks of these companies.
Tesla Stock Flagging in April
Tesla (as of April 11):
- Year-to-date: -30.86%
- Past year: -8.05%
- Past month: -3.38%
On April 2, Tesla announced its first quarter deliveries, an event deemed “an unmitigated disaster” by Wedbush Securities analyst Dan Ives.
“We view this as a seminal moment in the Tesla story for Musk to either turn this around and reverse the black eye 1Q performance. Otherwise, some darker days could clearly be ahead that could disrupt the long-term Tesla narrative,” Ives wrote in an April 2 note.
Yet, CFRA Research said in an April 2 note that it maintained its Buy opinion on Tesla, noting, however, that it cut its 12-month target by $15 to $220.
“Despite near-term headwinds, we continue to regard Tesla as one of the market’s most compelling long-term growth stories and the stock appears to be fully discounting various issues surrounding the name after a precipitous YTD drop,” CFRA equity analyst Garrett Nelson wrote in the note.
Lucid’s Stock Also Dips
Lucid (as of April 11):
- Year-to-date: -36.14%
- Past year: -68.68%
- Past month: -11.37%
While the stock has had lackluster results in the past year, the company reported first-quarter deliveries above market expectations on April 9. Price cuts helped “boost demand for its luxury electric sedans, sending its shares up about 3%,” according to Reuters.
Lucid delivered “1,967 vehicles in the first quarter, compared with estimates of 1,745, according to eight analysts polled by Visible Alpha,” Reuters added.
Another driver that could help boost the stock is that in March, Lucid raised $1 billion in capital “from an affiliate of Saudi Arabia’s Public Investment Fund,” according to CNBC.
“The latest investment by the sovereign wealth fund underscores a key advantage Lucid has in the race for survival among struggling EV startups,” CNBC reported.
It should be noted, however, that Lucid stock is far below its initial offering price, while Tesla remains over 13,300% higher than its initial price. Whether that means that Tesla is overpriced and saturated, or that Lucid is a bargain, is for each responsible investor to decide.
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