Rivian shares plunge again on weak sales, outlook

By Chris Isidore, CNN

Shares of upstart EV maker Rivian plunged more than 16% Wednesday after ithe company reported disappointing revenue and gave 2023 delivery guidance that fell short of Wall Street hopes.

The company reported a loss excluding special items of $1.6 billion in the fourth quarter, up from $1.2 billion in the year-earlier period. That was better than the $1.8 billion forecast by analysts surveyed by Refinitiv, but Rivian’s quarterly revenue of $663 million fell short of analysts’ forecasts of $742 million.

The biggest problem for the stock, however, was the company’s announcement that it expects to deliver 50,000 vehicles this year. While that would be about double what it delivered through the end of 2022, it was short of Wall Street hopes for 60,000 deliveries in 2023.

The 50,000 vehicle production target is due to the “risks and uncertainties associated with the supply chain,” said CFO Claire McDonough in a call with investors Tuesday.

“We expect full year production to be back-end weighted due to supply constraints we believe will alleviate in the second half of the year,” she said.

But that explanation still disappointed analysts.

“A myriad of production issues at its main factory in Illinois continue to haunt the Rivian story,” said Dan Ives, tech analyst for Wedbush Securities. “While this is a massively complex operation in Normal, IL, it is disappointing that 18 months later Rivian remains in this spider web of production issues. The worry [is] that customers will start to churn to competitors Ford, GM, Tesla, etc., as reservations get pushed out.”

Rivian announced late last year that reservations for its vehicles stood at 114,000 as of November 7, not counting the order for 100,000 electric delivery vans from Amazon, one of its early investors. It did not provide an update on reservations in Tuesday’s report.

Ives, who has a buy recommendation on Rivian shares, cut his 12-month price target on the stock to $25 from $37. Shares of Rivian closed Tuesday at $19.30 before Wednesday’s latest plunge took it below $18 a share.

Rivian’s blockbuster initial public offering in November 2021 showed just how hungry investors were to find the “next Tesla,” and the EV stock was poised for huge gains on its strong growth prospects. The spike in share price immediately after IPO briefly made Rivian the third most valuable automaker on the planet, behind only Tesla and Toyota.

But its stock, and those of other pure EV companies, have struggled since then in the face of rising costs for parts and raw materials and other supply chain issues. In addition, there’s been slower demand in the face of growing EV competition and EV price cuts at Ford and Tesla. Last month, Rivian announced it was cutting 6% of its staff.

Shares of Rivian closed Tuesday down 89% from its all time high in the week following its IPO in late 2021, even before Wednesday’s further slide.

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