Here’s what investors should look for
A Rivian R1T electric pickup truck during the company’s IPO outside the Nasdaq MarketSite in New York, on Wednesday, Nov. 10, 2021.
Bing Guan | Bloomberg | Getty Images
Rivian Automotive’s electric pickups and SUVs are built to handle rough terrain, but even they might have trouble navigating the steep 57% decline in the company’s stock so far this year.
Rivian will be called upon to answer whether it can turn its fortunes around after the company missed 2021 production targets and made a controversial price increase for current reservation holders when the automaker reports its fourth-quarter earnings and 2022 guidance after the markets close on Thursday.
While investors will be monitoring last quarter’s financial results, their prime focus will be on guidance and any changes to previously announced plans amid global supply chain problems, Russia’s invasion of Ukraine and significant cost increases in crucial raw materials for its EVs.
Wall Street will also be looking at Rivian’s customer reservations and progress in ramping up simultaneous production of electric pickups and SUVs for consumers and an electric delivery van, the first orders of which are going to Amazon, holder of a 20% stake in the start-up.
“Ramping a new program, not to mention three, is always challenging especially for a start-up,” said RBC Capital Markets analyst Joseph Spak in an investor note last week.
Spak lowered his firm’s 2022 production estimate — from roughly 43,000 vehicles to fewer than 25,000 — and slashed its price target on the stock from $165 to $116 a share.
Shares of Rivian, which went public through a blockbuster IPO in November, closed Wednesday at $43.95 a share, up 4.1%. They were off about 8% midday Thursday.
Here’s what investors should know before Rivian’s results are announced:
Expect losses
Rivian is a growth story. Like many speculative EV start-ups, Rivian is a bet on its future, not its current financials.
Rivian is expected to report a fourth-quarter adjusted loss per share of $1.97 on revenue of $60 million, according to estimates compiled by Refinitiv.
For the third quarter, Rivian reported an operational loss of $776 million and a net loss of $1.23 billion.
Outlook
Rivian has said it plans to produce 150,000 EVs by 2023. That’s going to be a heavy task, given the company at the end of last year was averaging about 50 vehicles a week — an annual pace of 2,600 vehicles.
The company last year said it expected capital expenditures to be about $8 billion through the end of 2023.
Bank of America analyst John Murphy has said Rivian’s “near-term business success will be measured by orders and production trends” rather than financials.
For 2022, Refintiv consensus estimates put Rivian’s full-year adjusted loss per share at $4.97 and revenue at about $3.16 billion.
Production snags
Shares of Rivian nosedived in December after CEO Robert “RJ” Scaringe disclosed the company would miss its 2021 production target due to supply chain issues as well as challenges…
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