Rivian Reports Q4 Results Tuesday: Analyst Weighs In On Opportunities Vs. Challenges And Lists 3 Things On Investors' Radar

Electric vehicle startup Rivian Automotive Inc. RIVN is set to release its fourth-quarter results on Tuesday after the close.

The Rivian Analyst: Analyst Daniel Ives maintained an Outperform rating and $37 price target.

The Rivian Thesis: Rivian is beginning to turn the ship around with production numbers finally starting to meet Street expectations, Ives said. The analyst said the fourth-quarter consensus looks achievable, given the quarter’s deliveries came in at 24,337 units and cost-cutting initiatives are in place. 

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“With $13 billion of cash in the treasure chest, it's all about cash burn which looks manageable into FY24/FY25 to navigate this next phase of the growth story,” Ives said.

Earnings Call – Focus Items: The focus of the Street will likely be on 2023 production and delivery, as the company strives to capitalize on its existing demand, the analyst said. He expects deliveries of around 60,000 units for the year.

Investors may also be keen on finding out about the company’s commercial relationship with Amazon Inc. AMZN, Ives added.

The analyst said he would look forward to an update on reservations. The company disclosed 114,000 reservations for its R1 platform, including the R1T EV pick-up truck and R1SUV, in early November, up from 98,000 units at the end of June. Investors will likely want to know if the softer macro backdrop or slow ramp-up of production is in any way resulting in cancellations, Ives added.

The Outlook: Rivian, according to the analyst, has a “strong brand and unique opportunity” to capitalize on the EV opportunity, Ives said. But he cautioned that challenges remain, especially competitive pressure. If production isn’t ramping up adequately, he sees potential customers bolting to rivals, including General Motors Corp. GM and Ford Motor Co. F.

“This is a fork in the road period for RJ & team to navigate this Rivian ship in choppy waters otherwise darker times could be ahead,” the analyst said.

The massive EV opportunities currently outweigh the challenges at current levels, Ives said.

Price Action: Rivian closed Monday’s session 6.52% higher, at $18.45, according to Benzinga Pro data.

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