Topline
Shares of Rivian tumbled 7% Friday after the electric-vehicle maker reported lackluster quarterly earnings and warned that supply chain issues would limit vehicle production in 2022, but despite struggling since going public last year, analysts still love the stock and remain optimistic about a rebound.
Key Facts
Rivian’s stock fell roughly 7% to a new low of around $38 per share after the company missed earnings expectations and reported a nearly $5 billion loss in 2021, but what really spooked investors was a weaker-than-expected production forecast for 2022.
Rivian told investors that it plans to produce just 25,000 electric trucks and SUVs this year amid ongoing supply chain disruptions, while Wall Street analysts had been hoping for closer to 40,000 vehicles.
The best-funded electric vehicle startup in U.S. history, Rivian has struggled to ramp up production since going public at a $90 billion valuation last November, and though the stock initially popped after the IPO, it has struggled since—with shares down roughly 63% in 2022.
Despite a slower-than-expected ramp-up in vehicle production, analysts aren’t giving up on Rivian just yet, and though many have adjusted their price targets lower to account for the recent selloff, the majority maintain a “buy” rating on the stock and remain convinced that it will recover.
The consensus view on Wall Street is that it will take time for Rivian to scale its output, much like Tesla’s slow production build up a decade ago, as RBC analyst Joseph Spak wrote in a research note: “We understand that [Rivian]
needs to show progress on the production ramp and rebuild investor confidence.”
Piper Sandler analyst Alexander Potter, meanwhile, noted that Rivian’s order backlog still looks strong—with roughly 83,000 reservations for its electric trucks and a deal with Amazon for 100,000 electric delivery vans.
Big Number: $18.4 Billion
Rivian is still well positioned financially, reporting $18.4 billion in cash and equivalents as of the year-end.
Crucial Quote:
“Since its IPO in late 2021, the Rivian story has been a bad episode out of the Twilight Zone for the Street,” as the company faces supply-chain problems, deals with price increases and issues weak guidance, Wedbush analyst Dan Ives said in a note Friday. Despite slashing his price target for Rivian stock to $60 per share from $130, Ives remains confident that the Rivian story is “fixable” and shares will eventually rebound.
Further Reading:
Rivian Shares Fall To Record Low As Company Warns Of Supply Chain Issues (Forbes)
Here’s Why Rivian Can Successfully ‘Challenge’ Tesla, According To These Major Firms (Forbes)
Rivian Shares Fall For First Time Since Blockbuster IPO (Forbes)
Electric Vehicle Startup Rivian Hits $90 Billion Valuation In Biggest IPO Since Facebook (Forbes)
