What happened
After a stunning rally in July, Rivian (RIVN +3.22%) stock is falling back to the ground this month. This week alone, shares of the electric vehicle (EV) manufacturer lost 14.5% through 10 a.m. ET Friday, according to data provided by S&P Global Market Intelligence.
Ironically, Rivian reported better-than-expected numbers for its second quarter, boosted its production guidance for 2023, and the stock attracted plenty of analyst upgrades this week. Yet, something didn't sit well with investors.
So what
Here are some key numbers from Rivian's second-quarter earnings report:
- Production: 13,992 vehicles, up 218% year over year and 49% sequentially
- Deliveries: 12,640 EVs, up 182% year over year and 59% sequentially
- Revenue: $1.1 billion, up 200% year over year
- Gross loss: $412 million versus $704 million in the year-ago quarter
- Net loss: $1.2 billion versus $1.7 billion in the year-ago quarter
It was clearly a good quarter, with Rivian also upping its production guidance for 2023 to 52,000 units from 50,000 units. That means the EV maker expects to more than double production this year versus 2022, and this was one of the biggest reasons why so many analysts bumped up their price targets on Rivian stock after its earnings release. Production was Rivian's biggest challenge in 2022, so an upgraded outlook for this year, even if small, comes as a breather and signals a potential turnaround in the company's prospects.
NASDAQ: RIVN
Key Data Points
Canaccord analyst George Gianarikas gave Rivian stock one of the highest price targets of $44 per share according to The Fly, meaning the analyst sees the EV stock doubling over the next 12 months from its current price. Gianarikas believes Rivian's vertically integrated strategy should boost customer experience and profitability, and help Rivian capture a "fair share" of the EV market over time.
Now what
Given all those numbers and outlook, it seems hard to figure out why Rivian stock fell, right? There could be two reasons behind its fall. First, Rivian is still burning cash rapidly -- it consumed nearly $1.4 billion of cash on operating activities. Also, it expects to see an adjusted loss before interest, tax, depreciation, and amortization of $4.2 billion this year.
The second reason may not be related to Rivian's performance at all. With Rivian EV stock zooming 66% in July after its production and delivery numbers came out (Rivian announces these metrics prior to its earnings release), the optimism was already baked into the stock's price. Rivian's earnings release, therefore, was just an excuse for some to take profits off the table.
