Rocketing to a price of $7.06 during today's afternoon trading session, shares of Lucid are still -13.9% below their average target price of $8.2. Could there be more upside potential for the stock? Analysts are giving LCID an average rating of hold and target prices ranging from $5.0 to $10.0 dollars per share.
Lucid's short interest can give us an idea of what future price movements the market expects from the stock. The short interest is the percentage of shares that are tied up in short positions, which will provide gains to the investor only if the stock price falls. The stock's short interest is 14.6% which seems to indicate a mixed sentiment on LCID
When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.
Another way to gauge the sentiment on Lucid is to look at the percentage of institutions that are invested in the stock. In this case, 80.6% of the shares are held by pension, mutual, and hedge funds, which shows that these institutions probably have strong confidence in the stock.
If institutions are invested in a particular stock, it shows in most cases that they have performed quality research and concluded that it is a good investment. In some cases, however, increases in institutional ownership could be a sign of a takeover attempt or proxy fight, which can actually injure share prices. Also, institutions are not infallible, and can certainly make miscalculations -- often with spectacular results.
Overall, there is mixed market sentiment on Lucid because its an analyst consensus of some upside potential, a hold rating, an above average percentage of its shares sold short, and a significant number of institutional investors. Warren Buffett famously said that in the short term, markets are voting mechanisms, but in the long term, they are weighing mechanisms. This means that long term investors should be aware of a stock's fundamentals before committing.
Buffett was one of the fist investors to focus on free cash flow as a yardstick for a company's health. Here are LCID's recent cash flows:
| Date Reported | Cash Flow from Operations ($ k) | Capital expenditures ($ k) | Free Cashflow ($ k) | YoY Growth (%) |
|---|---|---|---|---|
| 2023-02-28 | -2,226,258 | -1,074,852 | -1,151,406 | -80.77 |
| 2022-02-03 | -1,058,133 | -421,198 | -636,935 | -475.82 |
| 2021-02-15 | -570,196 | -459,582 | -110,614 | n/a |
