Why I Just Bought Lucid Stock -- and Why You Might Want to Buy Before May 5

Electric-vehicle maker Lucid Group (NASDAQ: LCID) will report its first-quarter results after the U.S. markets close on May 5.

We already know those results won't be great. (I'll get to that in a moment.) In fact, the stock is down almost 36% since the electric-vehicle maker pre-announced some of its earnings on April 14.

But I think Wall Street is missing something likely to be highlighted during Lucid's earnings report -- something that could cause the stock to rebound.

That's why I bought the stock a few days ago, and why you might want to buy it too.

Why Lucid pre-announced some of its first-quarter numbers

This will take a bit of explaining, so please bear with me.

Lucid announced a major cash raise on April 14 -- $750 million from two existing investors, along with a $300 million secondary stock offering -- for a total of $1.05 billion. (It also announced a new CEO, but that's another story.)

There was nothing bad about the raise itself. Much of it had already been announced. If anything, it was arguably bullish.

Image source: The Motley Fool.

But deep in one of the regulatory filings that accompanied the news, Lucid disclosed some preliminary first-quarter numbers. They weren't good.

Lucid's revenue of between $280 million and $284 million was far below Wall Street's $433.8 billion expectation. Its expected operating loss of between $985 million and just over $1 billion is much wider than the $692 million Lucid lost on that basis in the first quarter of 2025.

That news drove the stock sharply lower, and it hasn't yet recovered.

Certainly, Lucid will need to explain the revenue miss on May 5. But I have a feeling that the explanation is already in plain sight -- even if Wall Street's algorithms don't seem to have seen it yet.

The explanation for Lucid's revenue miss might be in plain sight

Lucid announced its first-quarter production and deliveries totals on April 3. The company produced 5,500 EVs in the first quarter, while delivering 3,093.

The gap between those two numbers raises a question, doesn't it? Why did Lucid build over 2,000 more EVs than it delivered?

It's a question that Lucid answered in the next paragraph of that press release.

"During the quarter, deliveries of the Lucid Gravity were disrupted for 29 days due to a supplier quality issue with the second-row seats. As a result, the company's ability to meet customer demand was affected. These issues have now been addressed, and the company is reaffirming its previously shared production guidance of 25,000-27,000 vehicles."

In other words, the deliveries shortfall -- and in all likelihood, the revenue shortfall -- was a timing issue. Lucid built a whole bunch of Gravity SUVs in the first quarter, but the quality of a batch of seats wasn't up to standard. Lucid had to sit on those otherwise completely done SUVs for nearly a month while better seats were made and delivered.

A Lucid Gravity. First-quarter deliveries of the Gravity were held up by a batch of seats that didn't meet quality standards, the company said. Image source: Lucid Group.

Those SUVs didn't count as "produced" until the proper seats were installed -- but installing seats, even 2,000 of them, takes a lot less time than delivering those vehicles to customers all over North America.

Long story short: Those vehicles will almost certainly be counted as "delivered" by the end of June, generating revenue that should make up for the company's first-quarter shortfall.

Are there finally reasons to buy Lucid stock?

I think there's a good chance that the stock will recover some or all of its recent decline after the company explains all this in next week's earnings call. That's why I bought a small stake in Lucid last week -- but it isn't the only reason.

Lucid has always built great EVs. The company has great technology. But it hasn't yet proven to be a great business, which is why its valuation is what it is.

The company's recent steps to bring costs under control and shore up its balance sheet have suggested that might finally be changing. The hiring of a new CEO seems like another promising step forward.

Does all that mean that Lucid is finally on the road to big growth? I genuinely don't know. But it might be. And at this valuation -- Lucid's market cap is just $2 billion -- I decided it was worth buying a few shares.

I still say that nobody should bet their future on this stock. But for the first time, I'm thinking it might not be a bad time to add a small position. I did.

John Rosevear has positions in Lucid Group. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.