Why Lucid (LCID) Is Tumbling Today

EV maker Lucid (LCID) is retreating 12.5% after the company announced that its CEO, Peter Rawlinson, had resigned. The news overshadowed the automaker’s stronger-than-expected fourth-quarter results.

Also importantly, Bank of America downgraded the shares to Underperform, citing Rawlinson’s departure.

An engineer examining an electric vehicle design in a lab, showing the company’s innovative battery systems.

The CEO’s Resignation

Rawlinson, who also founded Lucid, stepped down from the CEO position. However, he will stay with the company, serving as a Strategic Technical Advisor to the Chairman of the Board.

“Now that we have successfully launched the Lucid Gravity (SUV), I have decided it is finally the right time for me to step aside from my (prior) roles at Lucid,” Rawlinson said in a statement.

The EV maker announced that its COO, Marc Winterhoff, had been promoted to Interim CEO. The board had begun searching for a permanent CEO, the company reported.

The Highlights of LCID’s Q4 Results

Lucid’s revenue jumped 49% versus the same period a year earlier to $234.5 million, surpassing analysts’ average estimate by $22.7 million. Its loss per share, excluding certain items, came in at 22 cents, versus the average estimate of a loss per share of 28 cents.

The company’s deliveries soared 79% year-over-year to 3,099.

Bank of America’s Downgrade

The bank cut its rating on LCID to Underperform from Neutral. In the wake of Rawlinson’s resignation, the bank predicts that the company’s product development will “stall,” while the demand for its EV will “be dampened.”

The bank cut its price target on the shares to $1 from $3.

While we acknowledge the potential of LCID, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LCID but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: None. This article is originally published at Insider Monkey.