In anticipation of Rivian Automotive's (RIVN, Financial) first-quarter earnings report, JPMorgan analyst Ryan Brinkman has reduced the company's price target from $11 to $10. The analyst maintains an Underweight rating on the stock, indicating a cautious outlook for the electric vehicle manufacturer.
According to Brinkman, while automakers might mitigate some financial pressure by transferring tariff-related costs to consumers, challenges remain in maintaining earnings stability. This strategic adjustment in cost structure is seen as necessary to cushion the impact of tariffs on the overall financial performance.
As Rivian navigates these fiscal hurdles, investors will be closely watching the company's upcoming earnings announcement to assess its ability to manage costs and sustain growth in a competitive market.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 28 analysts, the average target price for Rivian Automotive Inc (RIVN, Financial) is $14.48 with a high estimate of $23.00 and a low estimate of $6.10. The average target implies an upside of 19.74% from the current price of $12.09. More detailed estimate data can be found on the Rivian Automotive Inc (RIVN) Forecast page.
Based on the consensus recommendation from 31 brokerage firms, Rivian Automotive Inc's (RIVN, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Rivian Automotive Inc (RIVN, Financial) in one year is $36.40, suggesting a upside of 201.08% from the current price of $12.09. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Rivian Automotive Inc (RIVN) Summary page.
RIVN Key Business Developments
Release Date: February 20, 2025
- Gross Margin: Positive gross margin achieved in Q4 2024.
- COGS Reduction: $31,000 reduction in cost of goods sold per vehicle in Q4 2024 compared to Q4 2023.
- Automotive Revenue per Unit: $86,000 excluding regulatory credit revenue.
- Regulatory Credit Revenue: Nearly $300 million in Q4 2024.
- Automotive Segment Revenue: $1.5 billion in Q4 2024.
- Automotive Gross Profit: $110 million with a 7% gross margin in Q4 2024.
- Software and Services Revenue: $214 million in Q4 2024.
- Software and Services Gross Profit: $60 million with a 28% gross margin in Q4 2024.
- Adjusted EBITDA: Loss of $277 million in Q4 2024, an improvement of $729 million compared to Q4 2023.
- Cash Equivalents and Short-term Investments: Increased to $7.7 billion as of December 31, 2024.
- Vehicle Production: 12,727 vehicles produced in Q4 2024.
- Vehicle Deliveries: 14,183 vehicles delivered in Q4 2024.
- Inventory Levels: Reduced by $372 million at year-end 2024 compared to the end of 2023.
- 2025 Vehicle Delivery Guidance: Expected between 46,000 and 51,000 vehicles.
- 2025 Capital Expenditures: Expected to range from $1.6 to $1.7 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rivian Automotive Inc (RIVN, Financial) achieved a positive gross margin in Q4 2024, marking a significant milestone for the company.
- The company successfully reduced the cost of goods sold (COGS) by $31,000 per vehicle in Q4 2024 compared to the previous year.
- Rivian Automotive Inc (RIVN) reported an increase in automotive revenue per unit, excluding regulatory credit revenue, to $86,000.
- The introduction of the Tri-Motor offering contributed to higher average selling prices and increased demand.
- Rivian Automotive Inc (RIVN) has a strong financial position with $7.7 billion in cash equivalents and short-term investments as of December 31, 2024.
Negative Points
- Rivian Automotive Inc (RIVN) anticipates a challenging demand environment in 2025, partially due to the impact of fires in Los Angeles, a key market.
- The company expects lower vehicle deliveries in Q1 2025 due to seasonality and supply chain challenges.
- Rivian Automotive Inc (RIVN) plans to shut down its manufacturing lines for approximately one month in the second half of 2025, impacting production.
- The company faces potential regulatory and policy changes that could affect market dynamics and incentives.
- Rivian Automotive Inc (RIVN) expects to report a loss in adjusted EBITDA for 2025, despite improvements in gross profit.
