RIVN Stock Alert: 62,000 Reasons Rivian Is Up 7% Today

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It has been a rough week for Rivian (NASDAQ:RIVN) following the electric vehicle (EV) company’s earnings and a National Highway Traffic Safety Administration (NHTSA) recall of up to 12,176 2022 R1T and R1S vehicles. During earnings, Rivian disclosed a 2023 production target of 50,000 units. Meanwhile, Wall Street analysts were forecasting production of 62,797 units.

CFO Claire McDonough had the following to say regarding the guidance:

“We are guiding to 50,000 vehicles produced for the year. This represents a doubling of year-over-year production while also accounting for the risks and uncertainties associated with the supply chain and integration of our new technologies.”

Still, RIVN stock managed to close today up by about 7% following a Bloomberg report of an internal all-hands meeting. According to people familiar with the matter, Rivian’s management is still targeting their “production master plan” to produce as many as 62,000 units this year. When contacted, a Rivian spokesperson declined to comment on the situation due to the confidential nature of the information.

RIVN Stock: 62,000 Reasons Rivian Is Up 7% Today

What this means is that Rivian may have guided conservatively due to the shaky state of the macroeconomic environment. Last year, the company produced 24,337 units, which slightly fell below its guidance for 25,000 units. Rivian attributed the miss to continued supply-chain constraints:

“We believe the supply chain will continue to be the main limiting factor of our Normal facility output. Our team continues to work on the introduction of new engineering design changes and key technologies which will take effect during the second half of 2023 to help mitigate anticipated supply chain constraints.”

Cash is another consideration for the production process, which Rivian fortunately has a boatload of. The company reported $12.09 billion of cash, cash equivalents and restricted cash on hand as of Dec. 31, which means that shareholders should expect no debt or equity raises in the near term. During the fourth quarter, operating expenses totaled $795 million, down from $2.07 billion a year ago.

Once Rivian is able to produce vehicles in a timely manner, profitability will be the next step. However, this could take quite some time, as analysts still forecast negative adjusted net income and GAAP earnings per share out to Q4 2024.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines. 

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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