Key Factors
Rivian outpaced consensus on the highest line, however losses and steering led to a inventory implosion.
The EV growth is over; now it is time for Rivian to show it will probably generate profits. 
Analysts are trimming their targets; there’s a threat that institutional promoting will change into 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. Inner metrics and steering 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 earnings, it is going to go the way in which of the wild buffalo into historical past. 
Not all market individuals are sad with the outcomes. Whoever offered the 15% of shares brief available on the market 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 earnings are nonetheless years away, brief sellers will doubtless lean into this commerce, and in the event that they don’t, sellers will doubtless meet any rebound and maintain this market in a downtrend. 
Rivian implodes on blended outcomes and weak steering 
Rivian had a tough quarter in This fall, ramping manufacturing for what seems to be no cause in any respect. The corporate’s income outpaced the consensus estimate, however overproduction lower 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 could be the solely excellent news. Relating to 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 automobile considerably, however the good points 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 steering isn’t any higher. 
Rivian’s run charge in This fall is an annualized 70,000 in comparison with the 57,000 deliveries steering. This greater than suggests the corporate will likely be slowing manufacturing within the coming yr, good for complete value however dangerous for leverage. The corporate forecasts annualized losses to vary close to $2.7 billion EBITDA. 
Rivian takes transfer to chop prices
Rivian introduced reducing 10% of its salaried workforce to scale back prices. The cuts are along with a choose variety of hourly staff 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 rapidly. With the EV market stalled, it’s unlikely Rivian will attain profitability on the right track. Moreover, worth cuts supposed to draw extra shoppers are more likely to proceed impacting outcomes and outlook in 2024. The race now isn’t to ramp manufacturing however to realize profitability whereas sustaining a aggressive edge towards Tesla NASDAQ: TSLA and different EV OEMs. Analysts assist Rivian however are reducing 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 concentrate on assumes the inventory is pretty valued at its new low close to $11. The consensus goal assumes a 100% upside however is falling rapidly and should not assist the value motion.
The technical outlook: Rivian will get taken to the dump
The value motion in RIVN isn’t promising for anybody besides a bearish dealer. The market is down greater than 25% and transferring 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 assist quickly, it is going to doubtless proceed to maneuver decrease till there’s some signal that earnings are coming quickly. 
As it’s, Rivian dangers dropping its institutional assist, which is important. Establishments personal greater than 60% of the shares, with Ford Motor Firm NYSE: F and Amazon NASDAQ: AMZN listed as prime holders. They may unlikely exit their stakes quickly, however different institutional holders and funds usually tend to lower losses. 
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