Rivian (RIVN) Reports
Rivian (RIVN) reported a solid Q3 yesterday and illustrated decent progress ramping up production while also driving costs per vehicle slightly lower, with major benefits to begin hitting in the second half of 2024 as all the new contracts and production tweaks take effect. Revenue in the quarter of $1.34 billion was slightly higher than consensus of $1.3 billion while gross margin of -35.7% was also a hair ahead of consensus of -36.9%. That helped adjusted EPS of -$1.19 beat consensus of -$1.32. Production in the quarter was 16,304 units while deliveries totaled 15,564. Full-year production should be around 54,000 units. I’m sure there will be some headlines saying “Rivian Loses $31K Per Vehicle In Q3”, which is true but kind of misses the big picture. It’s a start-up, not a 30-year old company. Looking out to 2024 sales should be around $6.52 billion (+48%) while EPS loss should decline to -$3.63 versus -$5.02 this year. Rivian is likely the most viable Tesla competitor and when investor risk appetite jumps and interest rates come down shares could take off – especially if that coincides with significant production growth and cost per vehicle reductions. All of this could be a 2024 story, so we’ll stick with it. BUY
