The electric vehicle (EV) market is heating up, fueled by a friendly regulatory environment and government initiatives. Many legacy automakers like General Motors (GM) and Ford are jumping onto the EV bandwagon and competing with existing EV incumbents like Tesla (TSLA).
For these EV companies, a website is an important tool of the trade. Visits to their websites can act as an indicator of the business’s success, as some of these automakers allow users to customize their vehicles, check different EV models and prices, and even allow consumers to place orders online.
Using the stock comparison tool, let us compare two EV stocks: Rivian, a relatively new entrant in the EV market, and Ford, a legacy automaker that is also going electric. We will try to gauge the consumer interest in these two companies by analyzing the website traffic data and also look at what Wall Street analysts are saying about these stocks.
Rivian Automotive (NASDAQ: RIVN)
Shares of Rivian have been on a downslide in the past month, tanking around 40% as the EV maker fell short of its production targets for 2021. At the end of 2021, the company produced 1,015 vehicles and delivered 920 of these vehicles.
But Rivian had already given an indication of this under-production at its Q3 earnings call, as the company’s management stated that it expected to fall short of its initial production target of 1,200.
There were a few reasons for the shortfall. Elaborating on it further, Rivian’s management said that it was finding it difficult to ramp up the production of three different vehicles due to supply chain constraints, the COVID-19 pandemic, and a difficult labor market.
However, the company’s delivery numbers in 2021 still exceeded RBC Capital analyst Joseph Spak’s estimates. The analyst said that given the delivery of 920 vehicles in 2021, it implied delivery of 909 units in 4Q21, still ahead of Spak’s projection of delivery of 860 units.
Moreover, the analyst pointed out that Rivian’s production figures for 2021 indicated that it had produced 1,003 vehicles in the fourth quarter of 2021 – an improvement in the production rate.
In an earlier update, Rivian stated that as of December 15, the company had produced 652 R1 vehicles. According to analyst Spak, this figure seemed to suggest that over the last 16 days of last year, “the production rate was ~23/day or ~159/week, so 2x the rate for the last period we had.”
Actually, the analyst thinks that the improvement in production could be even greater than his estimation since the production lines could have been closed or reduced due to the holidays and “it is possible that some RCV [Rivian commercial vehicles] vehicles are in the new number (management had indicated that it still expected to deliver saleable units to Amazon this month).”
Spak is also positive about Amazon’s initial order of 100,000 for RIVN’s Electric Delivery Van (EDV) with an option to expand the agreement. Amazon is also a stakeholder in Rivian, with a 20.2% stake. The analyst thinks that demand on the consumer side is the bigger opportunity for Rivian, but the key will be the company’s ability to increase its production capability.
The analyst added, “It does appear that things started to improve late in the year, and while production is challenging and we expect more hiccups along the way, we do see RIVN getting production right and becoming a larger player with a strong brand and diversified business model.”
Analyst Spak is bullish with a Buy rating and a price target of $165 (155.7% upside) on the stock.
Other analysts on the Street are cautiously optimistic on Rivian, with a Moderate Buy consensus rating based on 11 Buys and 4 Holds. The average RIVN stock prediction of $134.64 implies upside potential of approximately 108.7% to current levels for this stock.
The consumer interest in Rivian can also be gauged by its website traffic data. Our analysis of this data, provided by SEMrush Holdings (SEMR), indicates that in the month of December alone, Rivian’s unique visitors across all its domains were up by a whopping 162% year-over-year to approximately 1.2 million. In calendar Q4, Rivian’s unique visitors across all its domains have increased significantly to 5.1 million versus 1.6 million in the same period a year back.
Ford Motor Co. (NYSE: F)
Shares of Ford have zoomed up 82.9% in the past year, driven by strong demand for its EVs and robust free cash flows at the end of Q3. Last week, the automaker disclosed certain special items that could impact its fourth quarter and FY21 results. Ford is expected to announce its Q4 results on February 3.
One of these special items concerned the $900 million gain from the company’s equity investment in electric vehicle automaker Rivian Automotive, Inc. (RIVN). But post-Rivian IPO, Ford will reclassify the gain as a one-time post-tax special item.
This reclassification would mean that the $900 million gain will not be a part of Ford’s earnings before interest and tax (EBIT) or adjusted earnings guidance for FY21. This will drag down the company’s earlier FY21 earnings guidance of $10.5 billion to $11.5 billion.
Nevertheless, Jeffries analyst Philippe Houchois was positive about several matters. One is the gain from Rivian, and another is the impending initial public offer of Argo AI, in which Ford holds a majority ownership stake along with Volkswagen. Lastly, the analyst is positive about the company resuming regular dividends in Q4.
The analyst remained confident that Ford will be able to grow its earnings this year in both the U.S. and international markets, even as the company has acknowledged that certain headwinds will persist this year.
These include commodity prices that could rise by $1.5 billion in 2022, from a range of $3 billion to $3.5 billion in 2021, as well as other inflationary cost pressures.
But Houchois thinks that “product contribution, volume and efficiency” could offset these cost pressures.
The analyst was also upbeat about the “faster-than-expected stabilization of balance sheet through 2021” and a “very strong product cycle,” with the launches of F150, Bronco, and Mustang Mach E carrying into 2022.
Considering these factors, the analyst estimates Ford’s margin to be 7.6% (with more than 9% in North America alone) in 2022 and an operating profit industrial margin of 7.7% in 2022-23.
However, Houchois downgraded the stock from a Buy to a Hold but raised the price target from $20 to $25 (21.1% upside) on the stock. The price target raise reflected largely a higher free cash flow.
Explaining the rationale behind this, the analyst commented, “We think it is premature to re-rate legacy OEMs [original equipment manufacturers] for their EV progress since earnings remain mostly driven by cyclical shortages, returns remain within historical norms and the EV transition is largely a zero-sum-game initially.”
The rest of the analysts on the Street are cautiously optimistic on Ford, with a Moderate Buy consensus rating based on 8 Buys, 7 Holds, and 3 Sells. The average Ford stock prediction of $22.94 implies upside potential of approximately 11.1% to current levels for this stock.
The upbeat outlook on the stock is also supported by the Website Traffic data tool available on TipRanks. This tool indicates that in calendar Q4, Ford’s unique visitors have increased year-over-year by 4.3% to 50.8 million.
Bottom Line
While analysts are cautiously optimistic about both stocks, based on the upside potential over the next 12 months, Rivian seems to be a better Buy.
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