- Needham analyst Chris Pierce reinstated Rivian Automotive Inc RIVN with a Buy and a $26 price target.
- RIVN's initial vehicle production guidance for FY23 is well below consensus delivery estimates, likely causing a material reset in investor expectations.
- RIVN's robust net reservations must be taken with a large grain of salt, given that it will take longer to fulfill these orders, potentially leading to higher cancellations and lower conversion rates.
- Commentary on FY24 production was also discouraging, with RIVN shutting down production lines for software updates and equipment retrofits that can increase production levels long term. Still, they believe investors are much more focused on the shorter term.
- However, RIVN was adamant about achieving positive gross margins in FY24 and its ability to manage through FY24 without requiring additional capital.
- The analyst views demand as the most challenging problem, with RIVN's absolute reservation numbers increasing his comfort level.
- Production is being reset lower, but his confidence in RIVN's margin trajectory is only modestly lower post the 4Q22 print.
- Specific to demand, the analyst looked at the segment of the market RIVN is attacking, recent share gains for higher priced vehicles, and share shifts among legacy OEMs and came away positive on RIVN's positioning for future share gains.
- RIVN called out moving to their in-house-designed Enduro drive unit as a margin tailwind and to LFP battery chemistry for commercial vehicles.
- Looking further out, RIVN noted it could shrink the number of computers per vehicle as they streamline vehicle processes.
- Given RIVN's last communication on net reservations and current vehicle owner satisfaction levels, the analyst maintained a positive view of demand.
- Price Action: RIVN shares traded lower by 18.80% at $15.68 on the last check Wednesday.
RIVNRivian Automotive Inc
$11.062.51%
Edge Rankings
Momentum25.06
Growth49.34
Quality-
Value68.16
Price Trend
Short
Medium
Long
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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