Rivian is a hyped electric car stock that has been in endless fall since its IPO. But the company’s new financial report pushed analysts to consider that the worst might be behind Rivian. Let’s try to examine if this is the moment when we can invest in stock on the lows and reach success.
Rivian is a California-based company that produces futuristic electric vehicles – just imagine you are watching a movie released in 2000, about 2033. The firm went public in 2021, and its stock sharply rose right after the IPO. But then, a series of unfortunate events took place.
We could say that times are tough for all markets at the moment. But comparing Rivian shares with the S&P 500 index is better. We clearly see – this is a problem with Rivian and not just general patterns. Also, you should remember that there are many factors influencing Rivian as well as other assets. In order to forecast future market movements, you can use the economic calendar. It will show you all the most significant economic events.
Rivian’s earnings report for Q1 2023 gave rise to positive investor sentiment. In general, the company results are still far from a fairy tail, but several key indicators turned out to be better than expected. That’s why the stock hiked about 10%, although, after that, they adjusted to lower than pre-report levels.
Firstly, the electric vehicles manufacturer showed better loss per share (yep, loss, not earnings) – it’s $1.25 against an estimated $1.59. Moreover, Rivian’s Q1 revenue simultaneously beat expectations ($661 mln against $652.1 mln) and increased by almost $100 mln compared to Q1 2022.
Secondly, Rivian’s results turned out to be better than participants like Lucid, Fisler, and Nicola. Therefore Rivian might now rank higher in the eyes of investors.
Thirdly – and it’s a big one – the company has not changed its plans to have manufactured 50,000 EVs by the end of 2023. This means that Rivian is going to produce more than double the vehicles in comparison with 2022.
Among the other pluses, we can underline the continuing partnership with Amazon (AMZN stock) and cutting costs through the layoff of 900 employees (the last one is positive for the balance but also demonstrates that the company is still far from its peak performance).
The other fact we should pay attention to is their bet on expensive models of electric vehicles. On the one hand, it may generate more profit, but on the other hand, customers can make a choice in favor of other manufacturers.
The consensus forecast proves that most analysts believe in Rivian stock. It says that the shares have a “Buy” rating and might rise by 77% in the next 12 months. It might look like an offer you can’t refuse, but you need to remember that the stock has probably had the same prospects during many stages of its downfall. That’s why you should do your own thorough analysis before trading in any market.