'A Train Wreck', 'Black Eye for EV Industry', 'Case Study For What NOT to Do'... Analyst Destroys Rivian (RIVN) After Earnings; Shares Pop on Maintained Output Target

May 12, 2022 7:26 AM EDT
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Shares of Rivian (NASDAQ: RIVN) are up nearly 6% in premarket trading Thursday after the electric vehicle maker reiterated its FY production target.

Rivian reported an adjusted loss per share (EPS) of $1.43 in the first quarter, compared to the consensus estimates of a loss per share of $1.45. Revenue came in at $95 million, well below the estimated $131.2 million. Adjusted EBITDA loss in the quarter stood at $1.14 billion, while analysts were expecting a $1.16 billion loss.

As for its full-year forecast, Rivian still expects to produce 25,000 vehicles this year and anticipates a full-year adjusted EBITDA loss of $4.75 billion, compared to the estimated loss of $4.84 billion. The electric carmaker said increasing production in Normal, Ill., facility remains the company’s number one priority.

“Our manufacturing shops are demonstrating strong performance as our weekly production rates continue to climb when not constrained by supply chain limitations,” the company said in a press release.

“Supply chain continues to be the bottleneck of our production. The challenge has continued across a small handful of technical components such as semiconductors, as well as a few non-semiconductor components.”

Rivian had more than 90,000 net R1 preorders from U.S. and Canada consumers, as of May 9. Since changing its pricing in March, the carmaker has received more than 10,000 R1 preorders in the U.S. and Canada with an average price of over $93,000.

BofA analyst John Murphy said Rivian delivered “OK” Q1 results but the focus remains on the 2022 outlook.

“Somewhat encouragingly, RIVN reaffirmed its operational and financial outlook for 2022, and we note that expectations were fairly low heading into the quarter on pervasive supply chain constraints/disruptions that continue to plague the automotive industry, and for RIVN, hinder its production ramp,” Murphy told clients in a note.

Wedbush analyst Daniel Ives said Rivian made “some progress” on deliveries although the company continues to grapple with supply chain challenges.

“This quarter was not without issues, but it does finally appear that Rivian is on the right track with strong demand and a supply chain that should produce 25k deliveries this year reaffirming its guidance,” Ives said in a client note.

Still, the analyst didn’t mince words when it comes to Rivian’s post-IPO execution.

“Rivian has been a train wreck since its IPO and an overall black eye for the EV industry.” He also called the company’s communication with investors “a case study for what not to do.”

“To say the Rivian story has been disappointing to us (and the Street) so far would be an understatement. We believe Rivian from a core engineering and design perspective along with the Amazon commercial relationship has potential to be a major EV stalwart over the next decade. However, for that to happen they need to start delivering models to customers and stop the excuses,” Ives added.

The Wedbush analyst also cut the price target to $30.00 per share from $60.00 to reflect lower multiple and reduced estimates.

By Senad Karaahmetovic



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