Lucid Group (NASDAQ:LCID) is down over 52.4% YTD, which implies that it has to rise by 115.7% just to get even with the end of 2021. That means that investors have truly lost faith in the valuation of LCID stock. The main reason it is still reeling from the disastrous fourth-quarter earnings release on Feb 28.

Lucid significantly lowered 2022 production targets to just 12,000 to 14,000 EVs. It originally projected 20,000 EVs in its prior IPO slide decks. As a result, the market decided that its $40 billion market + market capitalization was simply too high. In fact, at today’s price, LCID stock is down to $30.23 billion.

This could easily be still way too high. For example, as of April 26, Tesla (NASDAQ:TSLA) stock is down 12%. But TSLA stock has a market cap of $905.8 billion and still trades for about 10.5 times its projected sales of $86 billion for 2022.

LCID Stock Valuation is Still Too High

By contrast, six analysts covering Lucid and surveyed by Refinitiv (shown on Yahoo! Finance) have forecast sales in 2022 of $1.3 billion. That implies that its similar Price-to-Sales (P/S) metric is 23 times (i.e., $30.23b/$1.3b). This is over twice as high as Tesla’s 10.5x multiple. That does not make much sense, especially since Tesla will produce over 1.4 million electric vehicles (EVs) this year compared to Lucids 14K.

In fact, even if we use Lucid’s 2023 sales projection of $3.39 billion (which is a stretch), it trades for 8.6 times sales. To be fair, we probably need to discount the 2023 forecasts by at least 30% to 40%, or $2.034 billion to $2.373 billion. That is due to the time value of money, and the likelihood that this projection will be lowered as they did recently.

As a result, the adjusted P/S multiple for 2023 is 12.3x to 14.3x. This is still too high compared to Tesla. That means LCID stock could fall between 18.7% to 30% from here to get down to 10x sales. That puts its target price at between $12.35 and $14.34, or $13.35 on average.

In other words, investors should wait for LCID stock to fall at least another 24% before it looks like a reasonable value.

On the date of publication, Mark Hake did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.