lucid stock has entered zombie territory investors should avoid it heading into its firstquarter earnings report and the shares should be avoided altogether according to one researcher zombie land is reserved for stocks that are stuck in a cycle of needing capital and where any gains in sales or cash flows are eaten up by the need for more capital to support the business “ lucid is a zombie stock which means it is burning cash at an alarming rate and is at high risk of declining to 0 per share” wrote david trainer the founder of independent research firm new constructs founder in a thursday report “the company has 23 months at best before completely running out of cash and the expectations baked into its stock price imply unrealistically high revenue and profit growth” it’s a bearish take lucid didn’t immediately respond to a request for comment lucid ticker lcid used about 39 billion building its business in 2022 and is expected to used about 3 billion and 21 billion in 2023 and 2024 respectively wall street doesn’t project positive free cash flow until 2026 lucid ended 2022 with about 44 billion in cash and 49 billion in liquidity when debt facilities were included that’s far short of the 51 billion in projected cash burn investors know capital raises are coming and have felt relatively better about lucid since saudi investment funds now own most of the company consider that lucid net of cash at year end is valued at roughly 10 billion rivian automotive rivn which is also an ev startup using cash to build its business is valued at roughly 0 net of cash saudi investors are backers who have a lot of capital investors should remember though that even if saudi investors continue to put cash in nonsaudi investors will own less and less of lucid over time “lucid is likely to report weakerthanexpected firstquarter 2023 earnings” added trainer “wall street’s earnings expectations for lucid have been bloated given the reckless hype around the stock and this creates a very high bar for the company to clear” lucid reports on may 8 wall street is looking for a 39 centspershare loss from sales of about 204 million lucid delivered 1406 vehicles in the first quarter of 2023 up from 125 delivered a year ago but down from 1932 delivered in the fourth quarter of 2022 investors would prefer to see sequential growth lucid stock is down about 36 over the past three months along with earnings investors will be looking for production guidance in february lucid said it expected to deliver between10000 and 14000 vehicles in 2023 that was a disappointment at the time wall street was looking for roughly 20000 to 22000 vehicles trainer is negative overall 42 of analysts covering the stock rate shares buy the average buyrating ratio for stocks in the sp 500 is about 58 the average analyst price target is at about 10 down from 15 at the start of 2023 lucid stock was down 06 in early trading thursday the sp 500 and nasdaq composite were down about 07 and 05 respectively