Electric-vehicle start-up
Rivian Automotive
reports earnings after the close of trading Wednesday. Earnings, however, might be the thing investors care about least.
Instead, EV demand, pricing, production efficiency, and new products likely will move the stock after results.
As for earnings, Wall Street expects a per-share loss of $1.35 and sales of $1.3 billion for the fourth quarter, according to FactSet. A year ago, the per-share loss was $1.73 from sales of $663 million.
Sales should come in higher, as deliveries grew during the last three months of 2023. Rivian delivered 13,972 units in the fourth quarter, up from 8,054 in the 2022 fourth quarter. For the full year, Rivian delivered 50,122 units in 2023, up from 20,332 in 2022.
For 2024, Wall Street expects about 66,000 units to be sold. That’s a combination of electric trucks and SUVs—which are built on the same platform the company calls R1—as well as delivery vans the company sells to
Amazon.com.
Rivian management’s guidance for deliveries, or production, in 2024 will be an important number to watch for. Investors will also want an update about the company’s R2 platform, which is due to hit roads in 2026; that will be the base for lower-price vehicles designed to expand Rivian’s addressable market.
Access to more of the market is an important next step for the company, as the market for higher-price EVs looks saturated. Americans bought some 1.2 million all battery-electric vehicles in 2023, up about 46% compared with 2022. More than 70% of those qualify as luxury vehicle sales. Rivian’s models are expensive: The R1S SUV starts around $75,000.
Excluding
Tesla,
which is considered a luxury car, roughly 25% of the luxury cars sold in the U.S. in 2023 were all-electric.
The next phase for the U.S. industry will be to supply Americans with affordable EVs. Doing that profitably will be a challenge—Tesla is the only U.S. pure-play EV maker that generates profits.
Wall Street projects Rivian used some $900 million in cash during the fourth quarter building its business. Estimates of cash use for 2024 are $4.8 billion. Slowing the cash burn would be seen as a positive by investors.
Whatever the company says, the stock should be volatile after earnings. Options markets imply the stock will move about 14%, up or down. Shares have moved an average of about 8%, up or down, following the past four quarterly reports. In three of those four instances, the stock fell.
Management hosts a conference call at 5 p.m. ET on Wednesday to discuss results.
Coming into Wednesday trading, Rivian stock was down about 17% over the past 12 months. The
S&P 500
and
Nasdaq Composite
were up about 24% and 36%, respectively.
Write to Al Root at [email protected]
Read the full article here