That rating is “based on an enterprise-value-to-sales ratio of about 3 times and an enterprise-value-to-Ebitda of about 37 times on our 2025 estimates,” wrote Bank of America analyst John Murphy.
“These are a premium to Tesla’s (TSLA) - Get Tesla Inc Report early trading multiples and to average multiples from EV original-equipment-manufacturer, SPAC peers, but still a notable discount to TSLA’s recent trading multiples on a forward five-year basis.”
The rating “reflects our view of LCID as one of the most legitimate start-up EV automakers,” Murphy said.
Lucid recently traded at $19.88, up 4.9%. It has slid 27% since its July 26 Nasdaq debut amid valuation concerns.
“Besides the management team’s industry experience, LCID’s key competitive advantages are innovative/competitive technology validated by Formula E, an interesting/attractive product with the Air sedan, arguably intangible value in the Lucid brand, and a greenfield approach to manufacturing electric platforms/vehicles,” Murphy said.
“Although this does not mean complete avoidance of the obstacles many EV startups have endured from concept to commercialization, we assign much more credibility to LCID’s success in this endeavor.”
Lucid went public following a merger with special purpose acquisition company Churchill Capital, a company started by investment banker Michael Klein.
The startup received about $4.4 billion in cash from the transaction, after expenses, according to reports.
Saudi Arabia's Public Investment Fund has invested more than $1 billion in Lucid. It owns about 60% of the company.