Rivian's Stock Ahead Of Q3 Report: Will Narrower Losses Drive Investor Confidence?

Electric vehicle startup Rivian Automotive, Inc. RIVN is set to announce its third-quarter results on Tuesday after the market closes.

Q3 Expectations: Analysts expect a narrower loss of $1.32 per share, compared to last year’s loss of $1.57 per share. The Irvine, California-based company is projected to report revenue of $1.327 billion, as per Benzinga Pro data, marking a substantial 140% year-over-year increase from the previous year’s $551.57 million.

Rivian reported in early October that it produced and delivered 16,304 units and 15,564 units in the third quarter. The company remains on track to meet its annual production guidance of 52,000 units, as previously stated.

Rivian Stock Trajectory: Over the past year, Rivian shares have declined by 46.3%, performing worse than the KraneShares Electric Vehicles and Future Mobility Index ETF KARS, which experienced a 20% drop. This ETF tracks the performance of electric vehicle manufacturers and suppliers. 

In contrast, the S&P 500 and the Nasdaq Composite have increased by 15.8% and 29.06%, respectively, during the same period.

Rivian saw a significant decline from November 2022 to December 2022. Although it attempted a recovery when the broader market improved in January 2023, it struggled to gain momentum, hitting a low of $11.68 (intraday) on April 26.

Following a relatively uneventful recovery until late June, the stock experienced a spike but failed to break past the consolidation phase observed in late 2022. Rivian reached its peak at just under $28 in late July and has since been in a broader downtrend.

Chart courtesy of Benzinga

See Also: Best Electric Vehicle Stocks

Rivian’s Earnings History: In each of the past four quarters, Rivian’s bottom line has beat Wall Street’s consensus expectations. Revenue missed estimates in both the third and fourth quarters of 2022 but came in ahead of expectations in the first and second quarters of 2023.

The stock reaction in the session that followed the earnings release has been as follows:

• Q3’2022 (Nov. 9): +17.42%
• Q4’2022 (Feb. 28) – (-18.34%)
• Q1’2023 (May 9) – +1.8%
• Q2’23 (Aug. 8) – (-1.97%)

Stock At Oversold Levels: Given the lean patch, it doesn’t surprise that the stock is trading at oversold levels. The relative strength index, a momentum indicator that measures the speed and change of price movements, is at 33.6, which suggests the stock is in oversold territory.

Chart courtesy of Benzinga

What Investors Will Focus On: Apart from the headline numbers vis-a-vis expectations, investors may also be keen to know whether the industry-wide price cuts have impacted Rivian’s gross margins. Given the company reiterated its 2023 production guidance only last month, it is unlikely that it will tinker with it.

Rivian CEO R.J. Scaringe and his management team will likely give more color on the forward outlook and the future product lineups on the earnings call.

The company announced $1.5 billion worth of convertible, green note offerings last month. The cash runway, which otherwise is the period until which its cash reserves can last at the current cash burn rate, could also be on the radar.

Rivian is expected to benefit from sales of its electric delivery vans to captive customer Amazon, which happens to be the EV startup’s biggest investor.

Chart courtesy of Benzinga

Investors may also look for an update on Rivian’s second-gen EV line-up, named R2, which would be manufactured at its Georgia plant. The company recently hired Mercedes-Benz Group AG MBGAF veteran Arnhelm Mittelbach as its plant manager.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

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