The electric SUV and truck Rivian Automotives (RIVN) and truck trucks look great, but its stock is not so tempting. The company’s shares were reduced by 90% of its IPO 2021. Inner mechanics of complaining and challenges throughout the industry, the rivno looks like a somewhat caterpillar for investors. Low demand, offer limitations and constant burns cash have disrupted the results of the company and the results of the shareholders.
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Although some analysts are optimistic about significant revenue growth over the next five years, hoping that the shares will finally fly as a wonderful butterfly for investors, RIVN’s most significant obstacle is high: they finally report positive gross margins after years of imaginative promises and missed goals.
History of the Rivian Automotive shares (RIVN) in the last 3 years
As the Q4 earnings approach later this monthThe administration hopes that the quarter will be the first step towards profitability, and the supply problems are no longer a significant problem. Although this could give Riviean’s short -term reinforcement, I struggle to see that the company can meet high market expectations, which has led to the supplies seriously overrated.
The prospect of market bicob on RIVN sections depends on the return return of the company in 2025 after a heavy 2024. Over the past year, Rivan’s shares have fallen by 14%, thanks to the challenges throughout the industry and the problems with the supply chain.
In early January, the company briefly abolished the spirits of investors Reporting that he has fulfilled his production and delivery goals– Cutting 49,500 vehicles and delivering 51,500, just above the initial expectations. But the great news for the beginning of 2025 was the relief of the previously reported lack of component, which retained production. Despite this positive update, Rivian is still facing major operational losses, reporting a $ 1.2 billion loss for the latest quarter. The company works to reduce production costs by finding cheaper materials and suppliers, but the path to profitability is at best uneven.
The first three quarters of 2024, Rivian reported on an operational loss of $ 4 billion. Although this is a slight improvement compared to a loss of $ 4.16 billion published by the company in the same period of 2023, the reality is that Rivian burns through the Gotovina an unsustainable pace. Since the cost of income is a significant question for Rivian (and most, if not all, EV companies), the production scaling becomes a big challenge with the need for great investment in materials and components. For Rivian, increasing the sale of vehicles does not reduce production costs. Unlike technological companies that can use the economy of scale, Rivian’s path to profitability is slower and more complex.
Since Rivian is still far from profitability and in early growth stages, the traditional assessment metrics may not give a complete picture of the company’s value. In this case, the use of a reversed discounted cash flow method may be a more useful way to evaluate Rivian assessment.
Currently, the Riviana section is traded at $ 12.50 per share, which, based on my calculations, suggests an ambitious annual growth rate (CAGR) of a 5-year revenue of 31%. To get to this rate, I use Rivan’s latest twelve -month data for the basic year, showing revenue of $ 4.55 billion, and an average operating margin of 8% in the automotive industry (since Rivan’s margins are currently negative). I am also with the fact of depreciation and depreciation of $ 1 billion and Capex of $ 1.12 billion for the same period. For these budgets, I assumed a WACC (discount rate) of 10%, which is a reasonable moderate and long -term growth rate of 2.5%.
If Rivian can turn their margins positive – at least in accordance with the automotive industry – it should still hit revenues of ~ 17.5 billion dollars by 2030. It is a pretty steep mountain to climb, given the challenges that Rivian faces in scaling his EV production.
Surprisingly, long -term prospects for Rivian Wall Street are a little lush. Analysts expect that the company will receive $ 4.67 billion in revenue in 2025 and $ 40.13 billion by $ 2030, suggesting a solid 56% CAG revenue.
On Wall Street, Rivn Stock has a consensitive Hold assessment based on two purchases, seven holders and two sales ratings in the last three months. Average Rivno price of $ 13.78 per share implies the potential ~ 9% of the rise compared to current levels.
Forecasting shares of Rivian Automotive (RIVN) in the next 12 months, including a high, average and low price
Going against consensus, Bernstein analyst Daniel Roeska It has a sales rating on Rivian stocks and is skeptical of these long -term optimistic projections. He believes that the consensus is overestimating the Rivian cars market and does not fully calculate the huge capital expenditures necessary to achieve these goals of revenue.
Another bear is Cfra analyst Garrett Nelsonwhich is skeptical of Rivia to achieve a positive gross Marz in 2025. The analyst also remains concerned about the company combustion rate, especially given the concern about the demand for EVS.
February 20, after the bell closes, Rivian will report on the results of Q4 and full 2024although the preliminary delivery numbers have already been published. In order to win market expectations, Rivian must report a loss per section of less than 69 cents and revenue above $ 1.39 billion.
Rivian Automotive (RIVN) Financial Prognosis Considering the Call of Earnings coming on 20 February 2025
However, I believe that the key focus will be on Rivian’s goal of achieving positive gross margin in Q4 and throughout the FY2025. According to the prognosis in the last quarter, the company aims to achieve this turning point through initiatives to reduce costs and operating efficiency. For example, Rivian has already reduced material costs per vehicle by 20% in Q4 compared to earlier in the year.
In addition, Rivian works on new platforms for vehicles, such as R2, which is expected to significantly reduce production costs. AND R2 platform, set to launch in 2026It is designed to be more profitable, allowing Riviana to offer vehicles at lower prices, at the same time improveing margins.
So, if Rivian manages to surprise the market by publishing positive gross margins and giving bold prospects for 2025, this could trigger supplies. This would serve as a powerful short -term catalyst and could help the spring spring and consolidate its gains, so it is so long under pressure.
I am not a big fan of electric drives companies that lose so much money when demand does not grow as fast as some may have hoped. Rivian is precisely in this distress – burdening himself for exchanging his business and far from constant profitability. Currently, the only way to improve marketing is the reduction of costs and adjusting the entrance to the vehicles.
The management team is convinced that Rivian will report on the positive gross margins in the Q4, continuing until 2025. However, maintaining strong margins will be difficult in the long run. Rivian must significantly increase his business in order to hit the ambitious goals of the Wall Street revenue in the next five years. As I believe this is crucial for justifying the price of shares, I am a bear on Rivijac, because I think some frustration will eventually appear during its strenuous uphill climb.
Still, I think the positive gross margins in Q4 and better chances of 2025 could give stakeholders short -term reinforcement (thus enables an upset investors who are waiting for better levels that will be sold to make running for trees, sure of knowing which this one The caterpillar will not turn into a butterfly soon).
