Rivian Automotive Inc. is slated to report first-quarter earnings after the bell Wednesday, with the EV maker battling a steep decline of its shares and fears of continued operational snags.
stock has been under renewed pressure this week amid reports that, after the post-IPO lockup period had passed, Ford Motor Co.
and others were promptly selling some of their Rivian shares.
And Ford did just so, saying in a filing late Tuesday that it sold 8 million of Rivian’s shares in the open market on Monday. The sale represented 7.85% of Ford’s stake in Rivian, with Ford still owning about 10.5% of the Class A shares outstanding.
The reports that major shareholders did not hesitate to sell stock after the lockup expiration and just days before the company’s first-quarter results “really sends the wrong signal to investors,” Garrett Nelson with CFRA told MarketWatch.
Questions around those sales “could really overshadow the earnings release,” Nelson said.
Rivian shares dropped nearly 21% on Monday to close at a record low of $22.78, but have recovered ground in the past two sessions.
Rivian has scheduled a conference call with analysts on Wednesday at 5 p.m. Eastern to discuss results. The call will be webcast.
Here’s what to expect:
Earnings: FactSet consensus calls for Rivian to report an adjusted per-share loss of $1.41 for the quarter. That would compare with an adjusted loss of $2.43 in the fourth quarter.
Revenue: The analysts polled by FactSet are calling for sales of $133 million for Rivian in the quarter, which would compare with $55 million in the fourth quarter and a smattering of sales in the third quarter.
Stock price: Rivian shares have lost about 78% this year, compared with losses of around 15% for the S&P 500 index.
The stock is trading around $23 a piece, off about 70% from its IPO price of $78 a share.
What else to expect: Rivian has guided for the production of 25,000 vehicles in 2022, reporting in April that it made 2,553 vehicles at its plant in Normal, Ill., and delivered 1,227 vehicles in the first quarter.
The numbers implied progress in the last few weeks of March, and made investors more confident Rivian could get to its guidance. and that perhaps the worst of the production snags are behind it.
One area of focus on Wednesday will be the production outlook and progress with the manufacturing ramp, Goldman Sachs analysts said.
Rivian “has made made strides” in the first quarter and it has to make “further improvements” this year to hit the guidance, the Goldman analysts said, but ultimately the company is expected to reiterate the 2022 production guidance.
As far as selling cars, Rivian will have to battle “ongoing logistics challenges” impacting the auto industry more broadly, in addition to the fact that the company is also ramping its own distribution network, the analysts said.
Adam Jonas at Morgan Stanley said he expects Rivian to go through nearly $900 million in free cash flow while delivering
1,200 vehicles. Rivian started the year with more than $18 billion in cash and may “burn” more than $7 billion this year, Jonas said.
Moreover, Rivian may need to raise an additional $3 billion by year-end, the analyst said. “Ramping EV car production in FY22is extraordinarily capital intensive.”
A hiccup that Rivian definitely left behind was uncertainty around its second plant in Georgia, which had faced staunch local and state opposition. Rivian got $1.5 billion in incentives to build the plant, straddling two counties east of Atlanta.