Rivian Reports Quarterly Production and Delivery Numbers | RIVN Stock Analysis
Summary
Parkev Tatevosian, CFA analyzes Rivian's third-quarter performance, noting that the company produced 19,700 vehicles and delivered 19,200. Parkev Tatevosian, CFA points out that while these numbers are an improvement, the growth is largely attributed to the lower-priced R2 model, which has driven down average selling prices compared to previous years. Parkev Tatevosian, CFA highlights a critical issue: Rivian is only utilizing about one-third of its 215,000-unit production capacity in Illinois, leading to high per-unit costs and substantial losses.
Parkev Tatevosian, CFA emphasizes the company's deteriorating balance sheet, with cash reserves falling from $17.5 billion to $5.3 billion despite multiple capital raises. Parkev Tatevosian, CFA believes Rivian needs to reach sales of nearly 200,000 units to achieve cash-flow break-even. While Parkev Tatevosian, CFA acknowledges that the stock's forward price-to-sales ratio of 1.7 and a discounted cash flow valuation of $13 suggest the stock is reaching fair value, Parkev Tatevosian, CFA is not yet upgrading the stock because the automotive and EV sectors remain unfavorable investment areas in the current market environment.
Mentioned Stocks
Reasoning: Parkev Tatevosian, CFA argues that Rivian is still losing massive amounts of money and only utilizing about one-third of its production capacity. While Parkev Tatevosian, CFA calculates a fair value of $13 per share via a DCF model, Parkev Tatevosian, CFA maintains a cautious 'avoid' stance because the EV industry is faces heavy headwinds and the stock has not yet hit a sufficient margin of safety below that $13 fair value estimate.
Reasoning: Parkev Tatevosian, CFA views Lucid as less attractive than Rivian because it is smaller and significantly further away from reaching profitability. Parkev Tatevosian, CFA includes Lucid in the list of EV stocks that were correctly identified as overvalued in previous years.
Reasoning: Parkev Tatevosian, CFA expresses long-term skepticism regarding ChargePoint, categorizing it as part of the overhyped EV industry that Parkev Tatevosian, CFA advised investors to avoid to prevent significant capital losses.