Rivian Surpasses Expectations with Strong Third-Quarter Vehicle Deliveries
Electric vehicle manufacturer Rivian (RIVN) made waves on Wall Street with its third-quarter delivery report, surpassing analysts’ expectations and indicating progress towards profitability. Despite this positive news, RIVN shares experienced a decline in Monday afternoon trading, falling below an early entry point.
In the third quarter, Rivian reported the production of 16,304 vehicles and the delivery of 15,564 vehicles. The company, headquartered in California, expressed confidence in achieving its annual production target of 52,000 vehicles by 2023.
This impressive performance exceeded analyst consensus, which had predicted third-quarter deliveries of 14,000 vehicles, according to FactSet. In Q3 2022, Rivian delivered 6,584 units. Rivian had previously exceeded expectations in its second-quarter delivery report, delivering 12,640 vehicles compared to Wall Street’s estimate of 11,000 deliveries. In that report, Rivian had also raised its full-year production guidance to 52,000 vehicles, nearly double the previous year’s production.
Rivian manufactures its vehicles in Normal, Illinois, with a production capacity of 150,000 units annually. The company currently offers electric pickup trucks, SUVs, and commercial vans. In the first half of 2023, Rivian produced 23,387 vehicles, while in the entirety of 2022, it produced 24,337 vehicles and delivered 20,332 units, falling slightly short of its production goal of 25,000 units for the year.
Baird analyst Ben Kallo had designated Rivian stock as a “bullish fresh pick” in anticipation of the strong third-quarter deliveries, citing expected improvements in sentiment due to cost benefits from an improving supply chain and the use of in-house components.
Shortly before Rivian released its delivery figures, Evercore ISI upgraded RIVN stock to “outperform,” suggesting it could join the ranks of EV giants like Tesla (TSLA) and BYD (BYDDF). Tesla and BYD also released their Q3 production and delivery figures on the same day.
Rivian stock initially saw a rise in value before decreasing by 2.5% to $23.66 during Monday’s market trading.
Rivian has had a tumultuous journey since its initial public offering two years ago, influenced by market conditions and execution challenges. Additionally, industry-wide supply chain issues have posed difficulties, and Rivian has faced its own launch-related complications.
At present, Rivian stock is trading slightly below an early entry point of $24.62, with an official buy point of $28.06, according to MarketSmith analysis. UBS initiated coverage of Rivian stock on September 12, assigning it a neutral rating with a price target of $26. UBS expects Rivian to achieve positive gross margin in 2024, but substantial volume growth is not anticipated until later in the decade, necessitating additional capital for future expansion.
Despite its ups and downs, Rivian stock has risen approximately 40% year-to-date. However, it experienced a 17% drop in August following a three-month rally. In September, the stock rebounded, gaining more than 7% over five consecutive sessions. Currently, Rivian shares are trading around 69% below their IPO price of $78.
Rivian stock currently holds the ninth position in IBD’s Automakers industry group, with a Composite Rating of 78 out of 99. Additionally, it has a Relative Strength Rating of 93, while its EPS Rating stands at 42 out of 99.
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Zoomer Zest journalist was involved in the writing and production of this article.
