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Rivian Automotive Inc. (RIVN) is an electric vehicle (EV) company that designs, develops, manufactures, and markets EVs for commercial and retail customers. The company offers SUVs, trucks, and vans under two categories. First is the R1, which includes two-row and five-row passenger pickup trucks; and second is the R1S, which includes a seven-row passenger SUV.
Founded in 2009, the company is headquartered in Irvine, California, and has a market cap of $8.64 billion.
Like many other EV stocks, Rivian stock has been struggling in 2024. RIVN has crashed 63% since the start of the year, and trades less than 3% above the all-time low of $8.26 it set earlier this month.
Rivian's Loss Widens, Cuts Jobs
Rivian released its Q4 results in late February, posting revenue of $1.32 billion on 13,972 deliveries, which beat analysts' expected $1.28 billion. The auto stock's Q4 loss stood at $1.56 billion for the quarter, narrower than last year’s loss of $1.80 billion. EBITDA also improved, with the loss narrowing year-over-year to $1.10 billion in 4Q from last year's $1.46 billion.
However, the per-share loss of $1.36, on an adjusted basis, was wider than expected.
Additionally, investors were disappointed by Rivian's 2024 guidance, with the annual production forecast of 57,000 vehicles arriving roughly in line with 2023 levels. Citing geopolitical tension and record interest rates, the automaker expects capital expenditure of $1.75 billion and adjusted EBITDA losses of $2.7 billion.
Rivian also announced plans to cut its workforce by 10% as it remains focused on cost efficiency.
Can Rivian Make a Comeback?
Despite the brutal selling, there has been some good news in recent times from one of Rivian's major patrons, Amazon (AMZN) - which has now become the largest private operator of EV charging stations in America. Back in 2019, Amazon ordered 100,000 vans from Rivian with a delivery date by 2030, but the lack of charging infrastructure means that only 13,500 vehicles have been delivered so far.
Amazon is targeting net zero emissions by 2040, and EVs will play a huge part in that. With more than 17,000 charging facilities at 120 warehouses across the U.S., Amazon's increased EV charging infrastructure should help boost deliveries from Rivian.
And while the EV industry's sales have softened, Rivian outperformed the broader industry in Q1, as sales increased 59% with the company delivering 13,588 vehicles. Rivian’s R1S was the 4th best-selling electric vehicle in the first quarter. Moreover, its newly announced R2 vehicle received over 68,000 registrations within the first 24 hours.
Should You Buy RIVN Stock?
Analysts aren’t as bullish as they were a few months back, but they still have a consensus “Moderate Buy” rating on the stock, with a mean price target of $18.09 - which signifies an upside potential of 112% from current levels. At present, 24 analysts cover RIVN, and11 have a "Strong Buy" rating, 2 have a "Moderate Buy" rating, 10 have a "Hold" rating, and 1 has a "Strong Sell" rating.
Last week, Needham analyst Chris Pierce reaffirmed a “Buy” rating on the stock along with a more modest price target of $13. Pierce noted that Rivian’s R1S used vehicle pricing has yielded a smaller-than-anticipated depreciation rate, and also commented favorably on the company's shifting capex strategy ahead of the R2 vehicle launch.
On the date of publication, Ruchi Gupta did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
