Rivian Automotive Inc. is scheduled to update investors on its quarterly earnings after the bell on Tuesday.Thank you for reading this post, don't forget to subscribe!
And Rivian RIVN, -2.99% executives will have some explaining to do: The company surprised Wall Street last month by offering $1.5 billion worth of convertible debt, a move that was described as a “blow to investors.” Was condemned in.
Rivian is also about to face more competition: Tesla Inc. TSLA, -0.31% announced in October that it had set Nov. 30 as the date to start sales of its unconventional-looking electric pickup Cybertruck.
A future Tesla truck may not compete directly with Rivian’s pickups and SUVs, which are marketed for the outdoors and rugged terrain, but it could eat into the group of people who want a Rivian EV and Can buy.
Rivian’s cheapest vehicles start at around $73,000, although the automaker is developing a second-generation vehicle that will likely be cheaper.
Here’s what to expect from the EV maker:
Earning: Analysts surveyed by FactSet expect Rivian to narrow its per-share quarterly loss to $1.34, compared with a loss of $1.51 per share in the third quarter of 2022.
Income: Sales are seen exceeding $1 billion for the second consecutive quarter, with analysts surveyed by FactSet expecting $1.32 billion. That compares with $536 million a year earlier.
stock movement: Rivian shares have underperformed the broader equity market. So far this year, the stock is down more than 7%, and has declined more than 47% in the past 12 months. This contrasts with gains of more than 13% and nearly 16% for the S&P 500 index SPX over the same time frame.
What else to expect: After investors were “blindsided” by the convertible notes offering in early October, “the focus will be on the company’s cash burn rate,” CFRA analyst Garrett Nelson said.
Topping the list is any comment about demand for Rivian’s R1T, an electric pickup truck, and R1S, an electric SUV, “amid signs of a significant slowdown in EV demand,” as well as related to capex costs and Rivian’s new Details manufacturing plant near Atlanta, he said.
Ivana Delevska, founder and chief investment officer of Spear Invest, agreed that the lack of cash and a path to positive margins were at the center of Tuesday’s report and call with analysts. Rivian has guided for positive gross margins in 2024.
“While the macro environment and high interest rates remain a significant concern for autos, Rivian is a niche manufacturer with a strong order book,” Delevska said. “Therefore, we believe the benefits on the cost side will outweigh the risks of topline pressure, as the company is a relatively niche player.”
Additionally, Rivian is likely to benefit from lower raw material costs and favorable pricing on components, he said.
The company showed “strong” third-quarter sales and production figures, he said, and some questioned why it did not revise up its guidance.
Management “is being appropriately conservative in the tough macro. “We don’t expect any meaningful earnings growth, but we do expect the cost side to move surprisingly upward,” he said.