Rivian In 'Right Place/Time' With Product, Strategy; Can Be 'Long-Term Winner': 4 Analysts Size Up Q1 Results, EV Company's Future

Zinger Key Points
  • Rivian reported Q1 financial results on May 7.
  • Analysts size up the Q1 results and what's next for the EV company.

Electric vehicle company Rivian Automotive RIVN reported first-quarter financial results that were mixed with revenue beating analysts' estimates and earnings per share missing the consensus estimate.

Here's what analysts were saying about the result and the company's future.

The Rivian Analysts: Bank of America analyst John Murphy had a Buy rating and $21 price target.

Goldman Sachs analyst Mark Delaney had a Neutral rating and $11 price target.

JPMorgan analyst Ryan Brinkman had an Underweight rating and $10 price target.

Needham analyst Chris Pierce had a Buy rating and $13 price target.

Related Link: What’s Going On With Rivian Stock Today?

Bank of America on Rivian: The potential for Rivian's positive gross margins in a key takeaway from Murphy.

"The weaker EBITDA results were largely due to higher operating expenses associated with the retooling of the Normal facility, which should pay back in meaningful cost savings starting in 2H:24," Murphy said.

The analyst highlighted Rivian's lowered capex guidance.

"RIVN still in right place/time with right product/strategy. We reiterate our Buy rating on RIVN, which is predicted on our view that the company is one of the most viable among the start-up EV automakers with attractive product, solid long-term strategy, and adequate funding well into 2025."

Goldman Sachs on Rivian: The progress the electric vehicle company is making on cost reductions is a key highlight for Delaney.

"We believe company commentary on the recent positive demand response that Rivian has seen, as evidenced by the 91% qoq (quarter-over-quarter) increase in demo drives, will be viewed relatively well by investors especially given the weaker market for EVs more generally," Delaney said.

A key debate from the analyst was if the demand could be sustained without price reductions.

"We believe the company's continued focus on costs is a positive. If Rivian executes well on the production ramp and controls costs, we believe that it has the potential to reach a positive gross profit in 4Q24."

JPMorgan on Rivian: Losses from the electric vehicle company are shrinking, but Brinkman sees little growth until the next vehicles arrive in 2026.

"Rivian reported overall mixed results Tuesday that do not appear to materially change the story which we continue to view as challenging," Brinkman said.

The analyst said Rivian's second-half financial performance will be "more telling to the future" of the company.

"The truer test, though, will come later, after Rivian launches its more mass-market vehicles."

Brinkman said Rivian could grow quickly from 2025 and beyond but will consume a lot of capital while doing so.

Needham on Rivian: The electric vehicle company can still be "a long-term winner," Pierce said in a new note.

"We continue to believe that RIVN will be a winner in the ICE to EV transition given consistent evidence of the RIVN vehicles resonating well with end users," Pierce said.

The analyst said electric vehicle adoption trends and near-term R1 demand could be an overhang on Rivian stock.

"Growing brand awareness remains a focus, through increased R1 test drives and the unveil of their R2 and R3 vehicles."

RIVN Price Action: Rivian shares were down 3.32% to $9.93 on Wednesday versus a 52-week trading range of $8.26 to $28.06. Rivian stock was down 59% year-to-date in 2024.

Read Next: Rivian Unveils R2, Teases R3: Key Features, Prices For Model Y Competitor

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