Rivian (NASDAQ:RIVN) has had its fair share of issues to contend with since its blockbuster IPO toward the end of 2021, but it looks like it is all finally coming together for the EV startup.
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For the first time since becoming a public entity, the company raised its guidance for a number of its metrics when it delivered its Q2 print and outlook on Tuesday. The headline numbers both beat expectations. Revenue increased by 207.7% year-over-year to $1.12 billion, ahead of consensus by $310 million. At the other end of the equation, adj. EPS of -$1.08 came in meaningfully better than the -$1.43 anticipated by the analysts.
Moving forward, considering the production ramp’s progress, which encompasses the acceleration of in-house motor manufacturing, along with improvements in the supply chain, the company revised its 2023 production forecast to 52,000 units, up from the previous estimate of 50,000 units.
Moreover, the company now sees an adj. EBITDA loss of $4.2 billion this year, compared to a loss of $4.3 billion beforehand, and primarily down to a shift in expense timing, Capex was lowered from the prior $2 billion to $1.7 billion.
The company notched another first in the quarter; accounting for around 70% of its total R1 production, R1S production overtook R1T production for the first whilst still showing similar profitability. By the end of the year, Rivian anticipates achieving a positive contribution margin from R1S production, primarily driven by improved product offerings, including the Max Pack.
The results offer something akin to a revival, says Canaccord analyst George Gianarikas. “Amidst the ashes of several upstarts seeking fortune but finding their unfortunate demise, Rivian is decoupling from its peer group of EV insurgents, regaining its operational footing, and reviving its mojo,” the analyst explained. “We continue to believe Rivian is on its way to capturing its fair share of the EV market over time through a sound, thorough, vertically integrated strategy that should lead to a desirable customer experience and strong profitability over time.”
Bottom-line, all of these developments merit a price target hike. Gianarikas’ objective moves from $40 to a Street-high $44, suggesting the shares will climb 93% higher over the coming year. Gianarikas’ rating stays a Buy. (To watch Gianarikas’ track record, click here)
Most on the Street join Gianarikas in the bull camp although some doubters remain. The stock claims a Moderate Buy consensus rating, based on 11 Buys, 6 Holds and 1 Sell. Meanwhile, according to the $27.81 average price target, the Street expects shares to climb ~22% from current levels. (See Rivian stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
