Here's Why Lucid Group Stock Is a Buy Before May 6

Lucid Group (NASDAQ: LCID) is expected to report earnings on May 6. There's a lot at stake. The company recently experienced some leadership changes, with its longtime CEO departing rather suddenly. The new CEO will need to provide important updates to the company's Gravity SUV sales trajectory, as well as updates on several new mass market vehicles under development.

All in all, it will be a critical quarter for Lucid Group. There are two reasons to consider buying shares before the announcement date arrives.

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Two reasons to buy Lucid Group stock before May 6

Following the launch of its Gravity SUV platform earlier this year, Lucid's revenue growth has picked up considerably. Analysts believe the company could nearly double its sales base in 2025. Compared to competitors like Tesla and Rivian Automotive, Lucid's sales growth this year should be spectacular. And yet the company's valuation is the lowest it has been all year, largely due to the steep market correction experienced thus far in 2025.

Right now, Lucid shares look like a bargain compared to other EV manufacturers. Growth estimates are so high that shares trade at just 4.7 times forward sales. This comes at a time when analysts expect 85.8% sales growth in 2025, with another 86.4% growth expected in 2026. Plus, the company is expected to start production on three new mass market vehicles next year, all of which are expected to be priced under $50,000. These more affordable models should provide yet another growth inflection point for Lucid in 2027 and beyond.

Put simply, Lucid stock is a bargain right now for long-term investors. The valuation is attractive on a historical basis, and yet growth rates are looking very promising over the next few years. But before you jump in, there are several critical risks to be aware of as well.

RIVN PS Ratio data by YCharts

This EV stock has some huge red flags

As the old saying goes: There's no such thing as a free lunch. The same rule applies for Lucid stock right now. Yes, shares are cheap just as the company's sales start to take off. But there are some serious risks to this story.

The departure of Lucid's CEO just as the company's growth hits an inflection point is a worrisome sign, though he had been with the business for over a decade. With only $1.6 billion in cash and cash equivalents, Lucid's liquidity should also be under question. It will take billions of dollars to get these new models to market, and it's not clear that Lucid has the financial firepower to scale according to its timeline.

At minimum, there could be sizable dilution to current shareholders. Plus, there's simply the issue of execution risk. As Tesla and Rivian have proven over the years, it can be difficult to get vehicles to market on time and on budget. Lucid will face the same hurdles as every other EV start-up.

Are shares worth a speculative investment at these levels? If you're looking for maximum growth potential, Lucid Group could be a great addition to a growth-oriented portfolio. But there could also be plenty of volatility as the company attempts to scale in 2025 and beyond. If you're unwilling to stomach strong swings in the stock price, it's likely best to leave Lucid to more risk-tolerant investors.

Should you invest $1,000 in Lucid Group right now?

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.