The mood on Wall Street seemed a bit better on Friday morning, as investors reacted positively to the potential for an eventual end to the war in Ukraine. That was enough to send futures on the Nasdaq Composite (^IXIC -0.64%) up nearly 1.75% as of 7:30 a.m. ET, even as economists at a major investment banking company cut their consensus for U.S. economic growth and predicted growing odds of a potential recession.
Despite the bounce, disappointment about earnings results from late Thursday made its presence felt in premarket trading on Friday. Rivian Automotive (RIVN -3.62%), which has been the subject of some controversy lately, saw further declines after releasing its financial results. However, the drop in Rivian shares was small compared to what one software-as-a-service stock suffered in the Friday premarket.
Image source: Rivian.
Rivian hits the brakes
Shares of Rivian Automotive were down almost 9% early Friday morning. The electric truck manufacturer posted massive losses and predicted that it wouldn't be able to make as many vehicles as investors had hoped.
It's not exactly surprising that Rivian's financial results weren't good, given that the electric vehicle (EV) specialist has only begun to ramp up its production efforts. Revenue for the fourth quarter of 2021 was $54 million, with Rivian delivering slightly more than 900 vehicles. That constituted the bulk of Rivian's activity for the full year, with just 11 vehicle deliveries prior to the last three months of 2021. Net losses came in at $2.46 billion for the quarter and $4.69 billion for 2021 as a whole.
That might have been fine had it not been for Rivian's discouraging guidance. The company had hoped to deliver more than 50,000 vehicles from its R1 and RCV lines in 2022, and it believes that its manufacturing capacity would still allow for that level of volume. However, Rivian anticipates supply chain constraints that will prevent it from getting the parts and materials it would need to make that many trucks. As a result, Rivian now expects vehicle production of just 25,000 for the year, and it believes its adjusted pre-tax operating losses will balloon to $4.75 billion in 2022.
Rivian has already annoyed its early customers by boosting prices on previously reserved vehicles. Now, shareholders are feeling the fallout, and despite its promising technology, it's unclear whether Rivian will be able to execute successfully enough to make it through these big losses and be sustainable in the long run.
A down move for DocuSign
DocuSign (DOCU 0.10%), however, saw even larger losses Friday morning. The SaaS stock aimed at electronic document handling and management took a 16% hit in premarket trading following the release of its latest financial report.
DocuSign continued to grow, but at slower rates than it has seen in the past. Revenue of $581 million was up 35% year over year, with a 25% rise in billings. Adjusted earnings climbed 30% to $0.48 per share, with free cash flow rising at an even faster rate. DocuSign brought on 280,000 more customers over the past year, bringing its total to more than 1.17 million clients.
However, DocuSign's guidance for the coming fiscal year showed even more dramatic slowdowns in the rate of gain for key metrics. Revenue is expected to be between $2.47 billion and $2.482 billion, which would represent just 17% to 18% growth. Investors didn't even get excited about a new $200 million stock repurchase program from the company.
DocuSign hopes that new partnerships can help it see even greater volume in the future. However, many still see the electronic document specialist as a pandemic play whose top growth prospects are behind it, and that's likely what's driving the stock lower on Friday morning.
