Electric truck startup Rivian Automotive will report fourth-quarter earnings Thursday afternoon. Trading in the stock following the report should be wild. Investors better buckle up.
Wall Street is looking for a loss of about $2 a share in the quarter from $64 million in sales.
Sales and earnings, however, don’t matter all that much right now. Rivian (ticker: RIVN) just started shipping vehicles. Investors and analysts will be more interested in the production ramp-up at the company’s facility in Illinois and any guidance for first-quarter and full-year deliveries.
Wall Street projects the company will deliver about 40,000 vehicles in 2022. Mizuho analyst Vijay Rakesh believes investors want to see current production running at about 350 units a week, with first-quarter deliveries coming in at about 4,000 units.
Any deviation, positive or negative, from those figures should move the stock significantly. Options markets imply shares will move about 18%, up or down, following earnings.
Volatility like that is always hard for investors to stomach, but the expectation of volatility after the Rivian earnings report probably won’t come as a surprise. Heading into trading Thursday trading, Rivan stock has moved more than 4%, up or down, in 10 of the past 12 trading sessions.
What’s more, Rivian stock is down almost 58% year to date and off almost 76% from its all-time high of almost $180 a share. Inflation, rising interest rates and Russian-Ukraine conflict has sapped some investor willingness to hold richly valued high-growth stocks.
Rivian qualifies as one of those. Shares trade for 12 times estimated 2022 earnings.
Rivian itself deserves some blame for recent stock declines too. Early in March, shares dropped 13.5% after the company tried to raise prices for its vehicles on existing reservations. The company reversed its decision a day or two later.
The pricing decision, and cost inflation, should come up on management’s conference call, along with delivery guidance. That event begins at 5 p.m. Eastern time.
Rivian stock rose 4.1% on Wednesday to $43.95. The S&P 500 and Dow Jones Industrial Average rose 2.6% and 2%, respectively.
Write to Al Root at [email protected]
