The electric vehicle (EV) industry is experiencing accelerated growth, driven by solid demand amid surging crude oil and gas prices and increased environmental concerns worldwide. Furthermore, supportive government funding and policies are contributing significantly to the growth of the EV industry. President Biden's Bipartisan Infrastructure Law, passed last fall, includes $5 billion for states to build a national charging network.
Despite the EV industry’s long-term growth prospects, it has been facing challenges over the past two years, including deepening supply chain issues aggravated by geopolitical crises and surging raw material prices amid 40-year high inflation. The ongoing automotive semiconductor chip shortage is causing production cuts worldwide further curbing the growth of the EV industry. R.J. Scaringe, CEO of Rivian, warned of a future battery shortage. The bearish sentiment surrounding the electric vehicle industry is evident in the Global X Autonomous & Electric Vehicles ETF's (DRIV) 24.3% decline year-to-date.
Against the backdrop, we think EV stocks Lucid Group, Inc. (LCID) and Fisker Inc. (FSR) are best avoided now, given their deteriorating fundamentals and bleak growth potential.
Click here to checkout our Electric Vehicle Industry Report for 2022
Lucid Group, Inc. (LCID)
Newark, Calif.-based LCID is a technology and automotive company. It designs, engineers, builds, and sells electric vehicles, EV powertrains, and battery systems. The company sells its products at its own geographically distributed retail and service locations and through direct-to-consumer online and retail sales. It operates more than 20 retail studios in the U.S.
In its fiscal 2021 fourth quarter, ended Dec. 31, 2021, LCID's total cost and expenses increased 151.8% year-over-year to $512.08 million. Its loss from operations rose 143.2% from the prior-year period to $485.68 million. The company's net loss and comprehensive loss amounted to $1.05 billion, representing a 235.9% increase from the prior-year period. Its net loss and net loss per share attributable to common stockholders amounted to $1.05 billion and $0.64, respectively.
The Street expects LCID's loss per share to amount to $1.22 for its fiscal year 2022, ending Dec. 31, 2022. Shares of LCID have declined 56.9% in price year-to-date and 26.1% over the past year. It closed yesterday's trading session at $17.64.
LCID's POWR Ratings are consistent with this bleak outlook. The stock has an overall F rating, which equates to a Strong Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
LCID has a grade of F for Value, Quality, and Stability. It has a D grade for Sentiment. Within the F-rated Auto & Vehicle Manufacturers industry, it is ranked #60 of 69 stocks.
To see LCID's POWR Ratings for Growth and Momentum, click here.
Click here to check out our Automotive Industry Report for 2022
Fisker Inc. (FSR)
FSR is engaged in developing, manufacturing, marketing, leasing, and selling electric vehicles. In addition, the Manhattan Beach, Calif., company participates in the asset-light automotive business. It operates through three segments: The White Space; The Value; and The Conservative Premium. FSR also provides Fisker flexible platform-agnostic design that develops and designs EVs in specific segment sizes.
FSR showcased its all-electric Fisker Ocean SUV this January at CES in Las Vegas, following its global introduction at the 2021 Los Angeles Auto Show. The Fisker Ocean SUV will be equipped with an advanced driver assistance system (ADAS), bringing state-of-the-art safety to drivers and passengers. The production of the Fisker Ocean SUV will commence in November 2022. However, it might take some time to realize gains from the project.
FSR's total operating costs and expenses increased 326.3% year-over-year to $133.45 million in its fiscal 2021 fourth quarter, ended Dec. 31, 2021. The company's loss from operations grew 326.3% year-over-year to $133.45 million. FSR's net loss and net loss per share came in at $138.43 million and $0.47, respectively, registering an increase of 58.4% and 20.5% from the prior-year period.
The $11,670 consensus revenue estimate for its fiscal 2022 second quarter, ending June 30, 2022, represents a 56.8% year-over-year decline from the same period in 2021. The consensus EPS estimate of negative $0.38 for the current quarter represents a 136.1% year-over-year decline from the year-ago value.
The stock has plunged 29.2% in price over the past six months and 27% over the past year. It closed yesterday's trading session at $10.48. FSR's POWR Ratings reflect its poor prospects. The company has an overall F rating, which translates to Strong Sell in our proprietary rating system.
The stock has an F grade for Quality, Stability, and Value and a D grade for Sentiment. It is ranked #64 of 75 stocks in the Auto & Vehicle Manufacturers industry.
To see additional POWR Ratings (Growth and Momentum) for FSR, click here.
Click here to checkout our Electric Vehicle Industry Report for 2022
LCID shares were trading at $18.25 per share on Wednesday afternoon, up $0.61 (+3.46%). Year-to-date, LCID has declined -52.04%, versus a -10.96% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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