Rivian Automotive (RIVN) Earnings Release Analysis 08 Aug 2023 Post Market

On the deliveries side, Rivian has exceeded analyst expectations of around 11,000 by actually deliver 12,640 models in the second quarter this year.

The production has also picked up after a slow start to the year where only around 9,400 vehicles was produced in Q1 2023. Rivian made nearly 14,000 EVs in Q2 which is an increase of 48% from Q1.

Rivian has previously warned that it would be retooling its electric delivery vehicle (EDV) assembly line to add its in-house Enduro drive units and LFP battery packs., this would mean Rivian will start slowly. The advantage of new drive units and batteries is to streamline production while cutting costs.

I will be looking at how this cost reduction could help in boosting Rivian revenue for Q2.

In this article, I will be analyzing its Q2 earnings release by looking at Rivian Automotive fundamental data as well as the technical analysis on how Rivian shares have been trading in recent weeks.

Rivian will still be unprofitable but I would expect the EPS to be better than $-1.43. There might be an increase of revenue as compared to Q1.

The increase in revenue and reduction in operating cost would be key to look at in this earnings report.

Based on the deliveries that Rivian has done in Q2, it should bring in some considerable revenues.

Rivian so far should be able to stick to its annual production guidance so far this year of building 50,000 EVs, this is more than 100% improvement compared to 2022 figures of 24,337 EVs produced.

This production number would be something to watch closely if Rivian can maintains what it set out to do this year.

I expect the EPS to improve to around -1.38 to -1.25.

Rivian has returned more than 40% growth YTD, despite the cooling off into its earnings, share price is up over 80% since late June 2023.

But its overall share prices are still considered down by more than 80% from its highs shortly after Nov 2021 when Rivian goes public.

Even though we saw that gross margins improved for Q1 2023 ending March because of cost-cutting measures, Rivian is still facing financial pressures.

Rivian is actually losing twice as much as it uses to produce the EVs. Rivian posted a net loss of $1.4 billion in Q1, down from $1.7 billion in Q4. The EV maker ended Q1 with $11.78 billion in cash, equivalents, and restricted cash.

I believe the figures would not be too far in Q2 than in Q1. The losses would still be there, only if Rivian have economic of scale in production, then we can see some significant improvement in their losses.

Investors are very positive about Rivian stock despite seeing investors portfolios drop by 0.2% in the last 7 days. Investors are increasing 7% in the last 30 days though.

I believe investors would be looking at how much losses gap will be shortened in Q2 as there have been cost cutting measures, with new tooling expected to save costs.

I will be looking at this area when Rivian do the earnings calls.

Based on SMA, Rivian is in a bear trend for a very long time (more than 200 periods), something we might want to take note is Rivian price seem to be moving above SMA200.

This normally indicate a trend change from bear to bull, but it is still very close to SMA200, hence, a slightly lower revenue or EPS could send Rivian back into a longer period of bear.

RSI does show some promising momentum as Rivian has exit the overbought recently and trend downwards. No sign of going back to overbought.

I would expect some buying activities before the earnings but there might not be so much sell offs.

ADX is above 40 indicate a Strong trend, with +DI above -DI by a wide margin, this indicate a strong bullish upside trend.

I think we could be seeing some positive move from Rivian when market open later on 08 Aug 2023.

From what I have observed, Rivian still have its financial pressure to overcome, the crucial part is how efficient is the cost cutting measures? Will we see a significant reduction in their production cost?

If the cost of production and pricing cut of the EVs is favorable, then we might see Rivian having a good Q2 and I believe the guidance and outlook for 2023 and the remaining quarter would be improved.

I will be monitoring how Rivian trading would be like at premarket on 08 Aug 2023, I believe investors’ interests is still there.

Appreciate if you could share your thoughts in the comment section whether you think Rivian financial will improved because of its cost cutting measure? If so, will this help Rivian propel its share price?

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.