Lucid Group (LCID -2.08%) looks expensive on multiple metrics. Shares trade at 9.1 times sales, despite the company never reaching profitability. Last quarter, its gross profit margins was deeply in the red. But don't let these numbers fool you. Shares are cheaper than they seem for one reason.

Lucid Group is about to double in size

Take a look at the chart. It's clear that from a size standpoint, Lucid has more room to grow than other EV stocks like Rivian Automotive and Tesla. And yet its valuation, at least from a price-to-sales perspective, is somewhere between the two.

But valuations are typically forward-looking, not backwards-looking. And when you hear what Wall Street analysts predict will happen to each company's sales base in 2025, Lucid's premium valuation will suddenly make sense.

RIVN Revenue (TTM) data by YCharts

According to analysts, Lucid should grow its sales base by 117% in 2025. Rivian, meanwhile, is expected to grow sales by just 11%, whereas Tesla is targeted to grow by around 19%.

With these estimates, we can then predict each stock's price-to-sales multiple one year from now. This metric is called a forward price-to-sales multiple. If analysts are correct, Tesla's forward price-to-sales multiple should be around 11, with Rivian coming in at roughly 2.5. Due to its rapid expected growth rates, however, Lucid comes in at roughly 4.5 times forward sales.

This is why looking at expected growth rates is so important. By the end of 2025, Lucid's valuation should look considerably more palatable. And if the market thinks these rapid growth rates will be sustained, don't expect its valuation multiple to drop all the way to 4.5. The market should rerate the multiple higher, resulting in direct gains to the stock price.

The lesson here is simple. When a company is growing as quickly as Lucid, make sure you research its forward valuation multiples as well as its current multiples.