Rivian Stock (NASDAQ:RIVN)
As Rivian Automotive (NASDAQ:RIVN) provides an update to investors on Wednesday, the outlook for the company’s production in 2023 will be a primary focus for market observers. This comes after an abundance of negative news regarding production from electric car start-ups.
The manufacturer of electric trucks is scheduled to release its quarterly results after the market has closed for the day. On Wall Street, they are anticipating a loss of $2 per share, with sales of somewhat less than $800 million.
It’s not all that vital to worry about sales and profits just yet. Rivian (NASDAQ:RIVN) has not yet reached its full manufacturing capacity, and the year 2022 marked the company’s first year of recording considerable sales. The future prospects will be more important.
This year, it is anticipated that production and sales will total anywhere between 60,000 and 65,000 automobiles on Wall Street. In 2022, the firm produced a total of 24,337 motor cars. When Rivian provided its initial projection for 2022 back in March of last year, the company estimated that it would produce 25,000 units by 2022.
That was quite an accomplishment to hit its first guidance. Several electric vehicle manufacturers had difficulty ramping up manufacturing. For instance, Lucid (NASDAQ:LCID) manufactured 7,180 automobiles in the year 2022. That is almost half of what it anticipated building at the beginning of the year 2022. In addition, Lucid stated this past Wednesday that it anticipates manufacturing approximately 12,000 automobiles in the year 2023. Wall Street had been anticipating a number closer to 20,000 units.
After the announcement of the update, Lucid’s stock price dropped. After the firm’s decision to resolve quality issues, production at Lordstown Motors (NASDAQ:RIDE) was suspended, and the company recalled the tiny number of vehicles it had produced. This caused the stock in Lordstown Motors to drop by almost 18% during the past week.
It is challenging to construct electric vehicles. Investors are keeping their fingers crossed that Rivian is outperforming some of its other start-up competitors.
In addition to production, other key indicators to keep an eye on include profitability and cash flow. According to an analyst who works for Battle Road Research named Ben Rose, speaking to Rose Barron, “Rivian’s route to profitability remains a big investment concern.” “Any new information regarding this will be essential.” The stock currently has a Hold rating from Rose.
Profits are not something that Wall Street anticipates till the end of the decade. In 2023, analysts anticipate a cash outflow of approximately $4.2 billion. By the end of the third quarter, Rivian’s total assets amounted to around $14 billion.
The options markets forecast that shares of Rivian will move approximately 10% in either direction when the company reports its earnings. Upon the release of the company’s third-quarter results in November, the stock price increased by 17%.
Around five o’clock in the afternoon (Eastern time), management will hold a conference call to discuss the results.
During trading on Tuesday, Rivian gained 3.2% to reach $19.03 per share. There was a loss of 0.1% on the S&P 500 index. The Nasdaq Composite Index (NYSE:COMP) climbed up by 0.06%.
Rivian stock has not moved up or down at all so far this year and is down approximately 73% over the course of the previous year as of trading on Tuesday.
As a result of Rivian’s troubles in 2022, the company lowered its aim for capital expenditures from the initially planned $2.6 billion to $1.75 billion by the time it presented its results for the third quarter. This afternoon, everyone will be focused on determining whether or not the reduction in the workforce would hinder the company’s capacity to increase output to the levels that are anticipated by 2023.
In contrast to the majority of other start-up electric vehicle manufacturers, Rivian’s reservation backlog has been steadily growing during the entirety of 2022. The business reported that it had received more than 114,000 preorders for its R1 platform pickup truck and SUV models as of the 7th of November.
Investors could anticipate analyst downgrades in the event that Rivian falls short of its production and sales projections for the following year or if there is a drop in the number of reservations placed. If that turns out to be the case, the price of the stock is likely going to drop. Yet, even if it surpasses expectations, you shouldn’t anticipate a meteoric rise in the stock price.
Rivian is still valued at roughly $18 billion despite the fact that its stock price has dropped significantly over the course of the past year. To assist justify that valuation, we will need to demonstrate both execution and results. Nonetheless, investors who are interested in the company should pay attention to the update that will be provided after the closing bell as well as the conference call that will be held by management at 5 p.m. Eastern Time today.
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