The problems have been piling up at EV maker Rivian (RIVN) all year. These have ranged from chip shortages impacting production and rising costs in the current inflationary environment, while adjustments to the vehicle lines and omicron-related absences also played their part in the company slashing production and delivery estimates.
Then there’s RIVN stock, which has been through the wringer, and some. Shares have declined by 85% since the post-IPO November highs with Monday providing the latest leg down. This time, the drop was due to Sunday’s expiry of the lockup period and the news that one very prominent shareholder is offloading a big chunk of their holdings.
That early investor is Ford – prior owner of 102 million RIVN shares – but not anymore as the news is that the auto giant is selling 8 million shares. That was enough to further rattle weary investors.
The latest bearish development comes just days ahead of Rivian’s Q1 earnings and a look at the company’s website traffic offers an unsettling picture too. Unique Visitors (UVs) have fallen recently by a large amount – 38% sequentially from 6.47 million in 4Q21 to 3.98 million in 1Q22.
RBC’s Joseph Spak thinks that the stock is likely to remain “under pressure” until the lock-up and any potential follow-on selling is done. Bullish talk from management could help restore faith and Spak thinks that for this to happen, key on the earnings call will be: “1) confidence in 25k production target; 2) commentary on building out supply chain and securing key inputs including raw materials for batteries.”
As for the upcoming print, Spak expects 1Q22 revenue of $99 million, just under the Street’s forecast of $101 million, adj. EBITDA of ($1.25 billion) vs. consensus at ($1.23 billion), and EPS of ($1.52) compared to Wall Street’s prediction of ($1.58).
Despite the issues, Spak “continues to be positive on the LT opportunity,” reiterating an Outperform (i.e., Buy) rating and $100 price target. The implication for investors? Potential upside of a whopping 324% from current levels. (To watch Spak’s track record, click here)
While the Street’s average target is not quite as exuberant, at $70.77, the figure still makes room for solid returns of ~200% in the year ahead. Overall, the 15 analyst reviews on file break down into 9 Buys, 5 Holds and 1 Sell, all resulting in a Moderate Buy consensus rating. (See RIVN stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
