Lucid could EXPLODE on *this* News.

hey everyone me kevin here so a lot of

you might remember that i have been

extremely bullish on lucid from the spac

merger on i expressed my frustrations of

lucid having its momentum swing way up

and then falling away down and

potentially way over selling back to

like 17 a share and for probably four to

five months i was asked kevin when is

this stock ever going to go up am i just

holding bags here thanks a lot kevin

what do i do and i kept saying folks

just wait until deliveries start because

once deliveries start hype and momentum

comes back and folks that's what we have

right now deliveries have started we

have hype momentum and the stock has

literally gone to the moon it's up over

450 percent this year it is way way way

way up over 55 dollars per share and

right now it feels like there's nothing

holding it back because we're in the

midst of an eevee super cycle but in

this video i want to talk about

something that a lot of us have

forgotten because we last talked about

this on march

2nd well the ev market turned to crap

in march

in april

in may

and barely started recovering in july

and so revisiting this piece of

information here i think is especially

critical because of an announcement this

week by

some big silicon valley tech company and

this is bullish for lucid now i'm going

to talk about my price trajectory for

lucid in just a moment but first

let's hit this clip here because this is

really really important

right after i mentioned that you should

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okay let's jump in over here so this is

going to look a little funny because

you're gonna have two kevin's here uh

but that's just the way it is you got

old kevin and uh whatever this is right

here and uh let's go ahead and listen to

about 15 seconds of this listen closely

here to what peter rollinson says

always connected with an ethernet

gigabit ring

super connected car two terabytes of

data on board storage super cloud

connectivity this is the perfect

platform for any um

um silicon valley

big company

to prove out its ad software i think

okay what is ad software autonomous

driving

software what is a potential big silicon

valley along with peter rollinson's

nudge nudge wink wink that he did there

just replay it if you missed that nudge

nudge wink wink

how about apple

folks literally this week apple said hey

we don't plan to have a full

self-driving vehicle until 2025

but we might partner with another

vehicle manufacturer beforehand we might

partner with another manufacturer

between 2022 and 2023

now they didn't exactly say why

but peter rollinson might have the

answer here hey we've got the perfect

stack where you might be able to test

out your ad autonomous driving software

if you're a big silicon valley company

come on folks it's either google it's

apple

uh maybe maybe it's um

qualcomm but actually i don't or or

nvidia but let me see where's qualcomm

uh headquarters let's see that oh

they're headquartered in san diego

that's interesting did not know that

so but anyway that's in my opinion

pretty bullish doesn't really matter

what company it is it's very very

bullish for lucid by the way

nvidia is also headquartered above santa

clara so uh or above san jose in santa

clara so i don't know that it really

matters which of these it is

maybe it's not even one of these but

you've got some pretty big options there

and that was a pretty clear nudge-nudge

wink wink in my opinion so to me

that's pretty bullish on lucid imagine

if lucid announced a partnership with

with apple

this stock would just go haywire it

would absolutely go

bonkers no guarantees total speculation

obviously just putting pieces of the

puzzle together here but what do we know

about price action here recently and is

this a stock that we want to potentially

fomo in now because the upside is way

higher well look lucid right now is a 90

billion dollar valuation it's somewhere

around 111 the size of tesla

and we've got in my opinion a few

negative catalysts coming up that could

potentially hurt the stock now that does

not mean i'm anti the stock while there

have been some frustrations with with

how deliveries are being processed at

the company

i've been a big fan of the stock now i

traded a lot of my investment in the

stock i traded a lot with call options

and i traded a lot with sold puts but

more importantly what we want to look at

here is what do we actually think is

going to happen upon negative catalysts

let's talk about that by looking at the

chart so right now we're sitting at a

55-21

this is a company that projected to

deliver around 520 vehicles here in 2021

uh and then potentially take off in 2022

in fact what i'll do is i'll pull up my

spreadsheet where i compare uh lucid uh

actually i don't even know that i've

revealed my lucid spreadsheet before so

here's a treat for you uh and i also

talk about how i built do my fundamental

analysis and all that in stocks and

psychology money seriously use that

black friday coupon because the price is

just going to go up from there so

initially we were expecting to deliver a

thousand vehicles in 2021 we think that

ramp's probably going to be closer to

520. so i i think it's there's a big

risk here uh downside miss risk so i'm

putting this here because this would be

reported in january of 2022 right if

we're expecting a potential

uh

partnership announcement by a company

like apple or some other silicon valley

tech company sometime in 2022 then

there's a good chance you're going to

have a really big negative catalyst for

lucid stock potentially in january now

they might kill it but i don't think

they will i think that they're going to

substantially miss on deliveries

it's very very important that they

started delivering because nobody

actually thought they would begin

delivering vehicles i had faith that

they would deliver vehicles i also had

faith the stock would go up once they

started delivering vehicles i did not

think it was going to momentum move as

much as it did i will tell you that and

when it ran from like 22 to 30 i thought

okay cool this is the beginning of the

move of of deliver vehicles being

delivered and that's it no it ended up

almost doubling from there right like 55

it's incredible but anyway

i do believe that that means right now

we're really built not on fundamentals

we're built on fundamentals plus a lot

of hype and that hype can get hurt on a

deliveries miss so if we end up with a

deliveries miss and let's say what if we

only deliver 420 vehicles right and

that's less than even the revised 520

expected for this year that's not going

to be as ideal because what people are

going to do in my opinion potentially in

the q1 report the earnings report is

they might take and extrapolate their

production rate here depending on what

kind of guide loose it gives and if the

guide or which almost certainly will be

the production rate are less than that

20 000 vehicle target for 2022

which 20 000 vehicles

that's a little less than 2 000 per

month

1666 vehicles if they're on a slower

pace than doing 1600 vehicles per month

which we substantially expect them to be

i mean think about it if they're trying

to get 500 out the rest of the year

starting in september when they first

made that projection that means

september october november december in

four months they got about a hundred

vehicles out a month they've got to

somehow 16x their production

realistically by q2 at the latest of

2022 otherwise the stock market's gonna

look and go whoa whoa wait a minute you

guys are ramping way

way too slowly this is not good

i think that is a potential

massive downside risk for lucid now

don't get me wrong i think there are a

lot of really cool upsides for lucid in

the long term uh a lot of lucid though

valuation wise is going to come down to

that value per vehicle we know lucid is

rushing to try to get to an under 80 000

a dollar vehicle let's say that they get

to a 79 000 vehicle they're selling

their 130s they're 140 000 vehicles 150

169 000 whatever they're selling

vehicles in the spectrum let's just go

ahead and say the average by 2025 is 80

000. i still think this is very very

bullish here that they would get to an

80 000 dollar average sale per vehicle

but let's say they do end up delivering

200 000 vehicles by then

if if they pull that off

throw in a little bit just a little less

than three percent for leases here that

would get us to about 16.4 billion

dollars of revenue if they had a 25

expense margin which is

not as

good as as tesla but this would still be

very very good in fact i'm going to

adjust honestly i'm going to adjust this

down and say that they have 80 in cost

which puts them a little bit closer to

where neo even sits today

uh so so that means they're spending 80

percent of every dollar in the vehicle

i'm actually producing the vehicle

uh and we throw some other things in

here like interest taxes whatever

now we divide by the amount of shares

outstanding the company has which the

company has uh

like twice as many shares outstanding as

rivie and it's worth noting that and the

price today is eighty dollars let's say

then at a hundred times multiple in 2025

with these figures

lucid would be worth 32 dollars a share

at 100 times multiple in 2025 well wait

a minute it's like twice that right now

exactly so let's let's now adjust this a

little bit so we don't sound like a big

old bear let's go back to that 75

expense ratio which means 25 percent

gross profit margin let's now assume

they bump their average vehicle

revenue to 90 000

and they still deliver 200 000 vehicles

by 2025. at 100 times future earnings

that puts them at about an 81 dollar

stock so you could see how quickly the

valuation can change based on that value

per vehicle and their ramp rate

everything about lucid's valuation comes

down to that ramp rate if that ramp rate

beats

lucid stock will do very well if that

ramp rate misses it will do very poorly

during those misses until it catches

back up to pace so with that said i

personally believe the biggest and most

challenging times for an automaker are

your first

years of ramping and then when you start

expanding to new factories which we know

there'll be a saudi arabia factory at

some point here as well once we get this

arizona facility to scale so i don't

want to sound like a lucid bear by

saying that i think right now at 55 57

whatever

it's it's kind of gone a little nuts

which is fine the stock market does that

but as an investor and lucid you know if

you're an investor and lucid i would

just think to myself is it is it

potentially okay to take some profits to

sell some calls for q1 or whatever and

uh and if i get called out oh well if i

end up selling a well if it runs to 80

you're gonna have to not feel bad about

that in somo right

but if we end up pulling back down to

some of the support levels we have which

these are long-term support levels not

necessarily recent support levels

a lot of these levels were drawn way

back on our candlesticks

but if we end up drawing back down to

say 37 or we draw back down to where we

have multiple different supports between

29 and 30 or worst case scenario we go

back to levels like the channel that we

used to have that 24 to 23 channel

if we go to any of these levels here

it's going to be a lot more attractive

of a company to invest in because at 36

dollars worst case scenario if they only

do three uh 200 000 vehicles hopefully

they do at least that at 80 000 with an

80 expense ratio by 2025 at least your

break even you're not losing in 2025

right and there's still that opium that

hopefully propels it if you can get it

down here i feel like you you start

getting a margin of safety realistically

the real margin of safety is when you're

around 23 24 a share because this is

where you could really go dirty if you

go with 80 000 per vehicle you go with

an 80 expense

and we go with a just a miss here we go

with 150 000 vehicles uh er we're gonna

get a little bit closer see look at that

now you're at 21 per share now you're at

much closer to that lower level and

you're really assuming some in my

opinion worst case scenarios i mean if

they can't in uh one two three

four full years

get to 150 000 vehicles which is

somewhere around 12 000 vehicles a month

12 to 13 000 vehicles a month that's bad

and there should be plenty of writing on

the wall before then that the company is

just totally not on track but i i don't

know that loose it's not going to be

able to pull that off i'm optimistic

and i also think you're going to want to

be around for that potential apple

catalyst it doesn't necessarily have to

be apple it could also be nvidia or

something else

i think it's interesting and and i think

it's a reasonably bullish i would not

buy the stock at these values though

because of this excitement

because even that excitement will wane

once the announcement is made but anyway

these are just some thoughts to think

about if you like the way i think about

stocks do consider checking out the

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price goes up at 11 59 pm on friday so

do it before you forget i always know

that feeling like oh yeah i'll do it

before then but then you forget and it's

like why didn't i just do it earlier now

i missed it

anyway thank you so much for watching

and we'll see in the next one bye

[Music]

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