Lucid Earnings Are Coming. Here's What To Expect.

Electric vehicle start up Lucid reports fourth quarter numbers Monday evening. It’s the first quarter the company reports with significant sales. How investors react to results will be anyone’s guess.

Lucid will report earnings Monday, and it's the first quarter expected to show significant sales.

Wall Street expects a 35 cent loss per share from almost $37 million in sales. That sales number implies Lucid (ticker: LCID) shipped roughly 250 cars in the fourth quarter of 2021.

That number is possible. But predicting the precise number is hard. The company just started delivering its Air sedan late last year.

Predicting the investor reaction to any number is harder than predicting the number. Morgan Stanley analyst Adam Jonas wrote recently that investors are ready for a weak number. That means shares could trade higher even on a sales miss.

Weak numbers usually mean something bad for a stock, but investors probably shouldn’t worry much if some early deliveries slipped into 2022. They also shouldn’t rejoice too much if the company manages to beat sales estimates.

The more important thing will be the outlook for 2022 deliveries. Wall Street expects Lucid to deliver roughly 20,000 cars this year. That would generate sales of more than $2 billion.

Guidance around 20,000 should be enough for the stock to work higher. That number would indicate strong demand for the expensive sedans Lucid is currently making. It would also indicate the company is making progress ramping up production.

Still, exactly how Lucid stock will react to any number is a tough call. The fourth quarter of 2021 is just the second quarterly report since Lucid closed its merger with a SPAC. Shares traded 24% the day following the company’s third quarter report in mid-November.

Investors should brace for volatility like that. Options markets imply shares will rise or fall about 13% following fourth quarter earnings.

Coming into Monday trading, Lucid stock is down about 31% year to date. Inflation, rising interest rates and the Russia-Ukraine conflict has sapped some investor enthusiasm for new, fast growing companies.

The S&P 500 and Dow Jones Industrial Average are down about 8% and 6%, respectively, so far in 2022.