Final yr’s greatest IPO, Rivian (NASDAQ: RIVN), reported its extremely anticipated fourth-quarter 2021 earnings yesterday night. The corporate had already slid to an all-time low previous to the decision and solely sank additional as soon as its books had been revealed to the world.
The agency is now buying and selling at near half of its preliminary IPO value of $78 and properly off its all-time excessive of $179.47.
What did Rivian report in its earnings name?
Rivian posted an adjusted loss per share of $2.43 versus an anticipated lack of $1.97, on income of $54 million in opposition to an anticipated $60 million. The fourth quarter additionally marked considerably widening losses for the agency, with $2.5 billion of the corporate’s $4.7 billion annual web loss occurring within the yr’s last quarter.
Income steerage for 2022 was withheld, however the firm ended the yr with $18.4 billion price of money accessible to spend.
As has grow to be typical this earnings season, the outlook for the approaching yr is the place the corporate actually fell brief. Rivian warned that it must lower its manufacturing targets in half for 2022. Provide chain points had been named as a “elementary limiting issue” that has seen targets slashed to simply 25,000 models. Based on CEO, RJ Scaringe,
“We’re little doubt experiencing some of the difficult provide chain environments the automotive business has ever seen.”
So, ought to I purchase Rivian inventory?
It’s robust to really confirm Rivian’s true worth to traders proper now. Widening losses and weakening manufacturing targets are each vital pink flags, however the firm has undoubtedly suffered on account of conditions largely outdoors of its personal management. Rivian delivered a complete of 920 autos in 2021, with 909 of these being delivered within the fourth quarter. Scaling as much as 25,000 for 2022 would mark an enormous enchancment — and that’s with manufacturing targets already halved.
Excessive demand for its vans, coupled with a major deal with Amazon to supply supply vans, leaves Rivian poised to make a giant splash within the electrical car (EV) market if it could actually scale its manufacturing correctly. Nevertheless, there stay some notable large gamers within the business who’ve the capability to produce vehicles at a rate far outside of Rivian’s reach. Tesla and Ford each possess infrastructure that Rivian can’t probably hope to match proper now.
Rivian nonetheless has an opportunity to carve out a sizeable area of interest within the EV house, however traders are unlikely to attend round for too lengthy when increasingly more legacy auto producers are pivoting in the direction of electrical vehicles. It wants to start hitting targets or else it is going to merely be left behind.