Electric truck maker Rivian delivered some much needed assurance to Wall Street Wednesday, even as it reported a larger than expected first quarter loss.
The company said that it had 7,000 new orders for its R1 electric pickup in the last two months, bringing total net orders up to 90,000 vehicles. And it said that despite supply chain problems that have cut its production by 25% since the end of March, it is still on track to build 25,000 vehicles by the end of this year.
And perhaps most assuring investors, it said it has enough cash on hand — $17 billion — to be able to launch production of its next vehicle, the R2, at a second planned plant in Georgia in 2025 and operate through at least that year.
The company said it had a first quarter operating loss of $1.77 a share, worse than the $1.44 a share forecast by analysts surveyed by Refinitiv. Revenue for the startup company was only $95 million, far less than the $130 million forecast.
But the company’s outlook going forward was more important to investors than the quarterly results. Shares of Rivian gained as much as 10% in after-hours trading following the report.
“To say the Rivian story has been disappointing to us (and the Street) so far would be an understatement,” said Dan Ives, tech analyst at Wedbush Securities in a note to clients. “It does seem the corner has been slowly turned. However… they need to start delivering models to customers and stop the excuses.”
Ives kept his overperform, or buy, recommendation on the stock. But he cut its price target to $30 from $60 a share.
It’s been a tough run for Rivian shares lately. News that early investor Ford (F) sold 8 million of the 102 million shares of Rivian stock it held sent Rivian stock down 21% in trading Monday. Its shares continued to slide another 10% during trading Tuesday and Wednesday to close at a post-IPO low.
Rivian had a very successful initial public offering in November, raising $12 billion, more than any other IPO since Facebook’s debut in 2012. Its stock continued to climb and within its first week it was the third most valuable automaker on the planet, trailing only Tesla and Toyota (TM), even though it had yet to report any sales.
But its first two financial reports in December and March disappointed investors and the stock lost almost all of its early value. Shares Wednesday were down a total of 89% from that post-IPO high.
The drop in stock price during the first three months of the year forced two major early investors, Ford and Amazon, to report multi-billion-dollar first-quarter losses because of the drop in value of Rivian’s stock. But both had reported even larger gains for 2021 when Rivian’s stock had soared, and their stakes in Rivian are still worth far more than their initial investments.
The drop in the stock’s value so far this quarter could mean each will report another hit to earnings in the second quarter, unless the after-hours rally in the shares continues.
The R1 pickup won the MotorTrend truck of the year award at the end of 2021, and Rivian was able to start production before rivals such as Tesla (TSLA), Ford and General Motors (GM) were able to begin production of their electric pickups. But it will face increasing competition, most notably from the Ford F-150 Lightning, the electric version of the best-selling vehicle in the United States, which began production last month.