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Rivian’s Stock Is Hitting New Lows After Weak Earnings—But Analysts Still Predict A Rebound

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Shares of Rivian tumbled 7% Friday after the electric-vehicle maker reported lackluster quarterly earnings and warned that provide chain points would restrict automobile manufacturing in 2022, however regardless of struggling since going public final 12 months, analysts nonetheless love the inventory and stay optimistic a few rebound.

Key Facts

Rivian’s inventory fell roughly 7% to a brand new low of round $38 per share after the corporate missed earnings expectations and reported a practically $5 billion loss in 2021, however what actually spooked traders was a weaker than anticipated manufacturing forecast for 2022.

Rivian advised traders that it plans to supply simply 25,000 electrical vehicles and SUVs this 12 months amid ongoing provide chain disruptions, whereas Wall Street analysts had been hoping for nearer to 40,000 automobiles.

The best-funded electrical automobile startup in U.S. historical past, Rivian has struggled to ramp up manufacturing since going public at a $90 billion valuation final November, and although the inventory initially popped after the IPO, it has struggled since—with shares down roughly 63% in 2022.

Despite a slower than anticipated ramp up in automobile manufacturing, analysts aren’t giving up on Rivian simply but, and although many have adjusted their value targets decrease to account for the latest sell-off, the bulk keep a “buy” score on the inventory and stay satisfied that it’s going to get better.

The consensus view on Wall Street is that it’s going to take time for Rivian to scale its output, very like Tesla’s sluggish manufacturing construct up a decade in the past, as RBC analyst Joseph Spak wrote in a analysis observe: “We perceive that [Rivian]

wants to point out progress on the manufacturing ramp and rebuild investor confidence.”

Piper Sandler analyst Alexander Potter, in the meantime, famous that Rivian’s order backlog nonetheless appears sturdy—with roughly 83,000 reservations for its electrical vehicles and a take care of Amazon for 100,000 electrical supply vans.

Big Number: $18.4 Billion

Rivian continues to be well-positioned financially, reporting $18.4 billion in money 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 corporate faces supply-chain issues, offers with value will increase and points weak steering, Wedbush analyst Dan Ives mentioned in a observe Friday. Despite slashing his value goal for Rivian inventory to $60 per share from $130, Ives stays assured that the Rivian story is “fixable” and shares will finally 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)

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