Key Factors
Rivian outpaced consensus on the highest line, however losses and steerage led to a inventory implosion.
The EV growth is over; now it is time for Rivian to show it may well earn a living. 
Analysts are trimming their targets; there’s a danger that institutional promoting will grow to be a headwind for worth motion. 
5 shares we like higher than Rivian Automotive
Rivian’s NASDAQ: RIVN This fall launch additional proves that the EV market bubble has burst. Inside metrics and steerage recommend demand has peaked and present capability is an excessive amount of. The takeaway is that enterprise isn’t getting any higher quickly; if Rivian can’t begin producing income, it’ll go the best way of the wild buffalo into historical past. 
Not all market members are sad with the outcomes. Whoever bought the 15% of shares quick in the marketplace is sitting fairly, with the market down 25% for the day, setting an all-time low for the inventory. As a result of the outlook is so gloomy and income are nonetheless years away, quick sellers will seemingly lean into this commerce, and in the event that they don’t, sellers will seemingly meet any rebound and preserve this market in a downtrend. 
Rivian implodes on blended outcomes and weak steerage 
Rivian had a tough quarter in This fall, ramping manufacturing for what seems to be no purpose in any respect. The corporate’s income outpaced the consensus estimate, however overproduction reduce into the underside line, aiding a larger-than-expected loss. The $1.32 billion in income is up 100% YOY and outpaced the analysts’ consensus goal by 470 foundation factors, which will be the solely excellent news. Concerning manufacturing and deliveries, manufacturing topped 17,500 models, with solely 80% delivered, and deliveries fell sequentially. 
The margin information is among the many worst. The corporate improved its gross revenue per car considerably, however the positive aspects had been overshadowed by stock value and CAPEX, leading to a deeper-than-expected loss. The corporate reported $1.73 per share in adjusted losses, $0.41 weaker than anticipated, and the steerage is not any higher. 
Rivian’s run price in This fall is an annualized 70,000 in comparison with the 57,000 deliveries steerage. This greater than suggests the corporate might be slowing manufacturing within the coming 12 months, good for complete value however unhealthy for leverage. The corporate forecasts annualized losses to vary close to $2.7 billion EBITDA. 
Rivian takes transfer to chop prices
Rivian introduced slicing 10% of its salaried workforce to cut back prices. The cuts are along with a choose variety of hourly employees however could also be too late. The corporate nonetheless has $9.7 billion on its steadiness sheet, however $2.7 billion in annualized losses will whittle that away shortly. With the EV market stalled, it’s unlikely Rivian will attain profitability heading in the right direction. Moreover, worth cuts supposed to draw extra customers are prone to proceed impacting outcomes and outlook in 2024. The race now isn’t to ramp manufacturing however to attain profitability whereas sustaining a aggressive edge towards Tesla NASDAQ: TSLA and different EV OEMs. Analysts help Rivian however are decreasing their worth targets and scores following the discharge. Among the many extra outstanding revisions is one from JPMorgan Chase, downgrading to Impartial and setting the brand new low worth goal. That focus on assumes the inventory is pretty valued at its new low close to $11. The consensus goal assumes a 100% upside however is falling shortly and should not help the value motion.
The technical outlook: Rivian will get taken to the dump
The worth motion in RIVN shouldn’t be promising for anybody besides a bearish dealer. The market is down greater than 25% and shifting decrease after the information. The quantity can be the best in months, suggesting a high-conviction transfer by the market. If this market can’t discover help quickly, it’ll seemingly proceed to maneuver decrease till there may be some signal that income are coming quickly. 
As it’s, Rivian dangers dropping its institutional help, which is critical. Establishments personal greater than 60% of the shares, with Ford Motor Firm NYSE: F and Amazon NASDAQ: AMZN listed as high holders. They may unlikely exit their stakes quickly, however different institutional holders and funds usually tend to reduce losses. 
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