EV Rivian (RIVN) Shares Fall Following Earnings, Analyst Concerned About Supply Chain Impact

Shares of Rivian (NASDAQ: RIVN) are trading 9% in the red in pre-open Friday after the company reported Q4 results.

RIVN reported an adjusted loss per share of $2.43 in the fourth quarter, compared to the estimated loss per share of $2.05. The company reported revenue of $54 million in the period, below the consensus estimates of $64 million.

Capital expenditure totaled $455 million in the period, while adjusted net loss came to $1.24 billion. Fourth-quarter EBITDA loss was reported at $1.11 billion, versus $341 million loss.

For the full fiscal 2022, Rivian said it expects an adjusted EBITDA loss of $4.75 billion and capex of $2.6 billion. RIVN said it expects to produce 25,000 in fiscal 2022.

Rivian reported 83,000 net preorders of the R1 model in the U.S. and Canada as of March 8. The company produced 2,425 vehicles as of the same date since the production began.

It expects supply chain constraints to continue through 2022.

"Through the first half of Q1 2022, we experienced several headwinds and other factors impacting our production ramp, including a planned 10-day shutdown to fine-tune our production lines, significant supply chain limitations, a large spike in COVID-19 cases likely attributable to the Omicron variant, and severe winter weather in Central Illinois,” Rivian said in its letter to shareholders.

BofA analyst John Murphy said Rivian is “still moving forward” despite supply chain setbacks.

“Despite what seems to be a tougher 2022 than initially envisioned, our Buy rating on RIVN is predicated on our view that the company is one of the most viable among the start-up EV automakers and also a relative competitive threat to incumbent automakers (and possibly to other automotive-related verticals). This is due primarily to RIVN’s comprehensive and well-defined business model, direct-to-customer sales and service strategy to own customers and capture revenue throughout the vehicle life-cycle, interesting/attractive product, relatively competitive technology, and intangible value in the Rivian brand. And while the competitive landscape for electric vehicles is fierce, we believe RIVN has more pieces in place and in progress than most EV OEM peers,” Murphy explained in a client note.

Wolfe Research analyst Rod Lache saw some positives in the report. The analyst lowered the price target to $78.00 from $130.00.

“We continue to believe that to assess RIVN’s potential, Investors need to look 5-years out (the company will likely have at least 3- plants, with 800,000 units of capacity in this timeframe)... Clearly, RIVN needs to rebuild momentum. But we still see this as likely as the company’s production cadence accelerates through 2022 and into 2023,” Lache said in a client note.

By Senad Karaahmetovic | [email protected]

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