Lucid Stock Drops 9% After Q2 Earnings; Analyst Cuts Price Target Amid EV Sector Challenges

Lucid Group Inc. (NASDAQ: LCID) has faced significant challenges this year, experiencing a decline of 34% in its stock value year-to-date, compounded by a further 9% slide following the release of its Q2 2025 earnings on August 5. Stifel analyst Stephen Gengaro has responded to these developments by lowering his price target for the electric vehicle maker from a pre-split $3.00 to $2.10, corresponding to $21.00 post-reverse stock split. The company executed a 1-for-10 reverse stock split on August 29 to adhere to Nasdaq’s minimum bid price rule. Notably, this adjustment primarily impacts the per-share price without altering Lucid’s overall market capitalization.

Gengaro's cautionary stance on Lucid reflects the firm's challenges related to cost efficiency, as evidenced by a shortfall in gross profit and adjusted EBITDA despite surpassing revenue expectations for Q2. Additionally, the company's decision to lower its 2025 production target range from 20,000 to 18,000–20,000 vehicles underscores the prevailing market volatility and headwinds affecting the EV sector. Despite these hurdles, Gengaro remains optimistic about Lucid's technological prowess and product lineup, particularly highlighting the Air sedan and the upcoming Gravity SUV as standout offerings. Nevertheless, he expresses concern about the necessity for Lucid to secure additional capital in the foreseeable future to sustain its operations and growth.

Looking forward, Gengaro is adopting a "wait and see" approach, seeking greater insight into the sales dynamics of the Gravity SUV and the launch of a midsize vehicle before potentially revising his outlook on Lucid's stock. Presently, the stock enjoys a consensus Hold rating among eleven Wall Street analysts, based on two Buy, eight Hold, and one Sell recommendations in the past three months, with an average price target of $3.14, implying a 58.59% potential upside from current levels.

Lucid's financial results for Q2 2025 revealed that the company produced 3,863 vehicles and delivered 3,309, marking a 38.2% increase compared to Q2 2024. However, the firm reported a revenue of $259.4 million accompanied by a GAAP diluted net loss per share of $0.28. As Lucid continues to navigate its financial landscape, it ended the quarter with approximately $4.86 billion in liquidity and adjusted its 2025 production guidance downward from 20,000 to 18,000–20,000 vehicles.

The broader consensus among analysts reflects caution about Lucid's near-term prospects, with many factoring in the competitive pressures and industry challenges faced by the company. Analysts predict that as Lucid continues to scale its production capabilities and bring new models like the Gravity SUV to market, its revenue could potentially grow; however, the firm may need to exercise prudent financial management to sustain its business amidst evolving market dynamics.

Ultimately, Lucid’s recent strategic moves, including the reverse stock split, aim to stabilize its market position and remain compliant with listing requirements. While some investors may see potential in Lucid's innovative product line and technological capabilities, the company's financial performance and future growth trajectory will likely remain under close scrutiny as it strives to compete in an increasingly competitive EV market.