Rivian Automotive Reports Strong Q2 Performance

Shares of EV start-up Rivian Automotive have experienced a significant surge in recent months, indicating positive investor sentiment. However, the company's upcoming second-quarter financial results announcement will be a crucial factor in sustaining this enthusiasm.

Leading up to the trading session on Tuesday, Rivian (ticker: RIVN) shares had seen an impressive 75% increase over the past three months, while the S&P 500 and Nasdaq Composite had risen by approximately 10% and 15% respectively. Although the stock has climbed around 32% year-to-date, it remains down by approximately 36% over the past 12 months.

The positive performance can be attributed to better-than-expected sales and production figures. In the second quarter, Rivian produced 13,992 electric vehicles and sold 12,640 units, surpassing Wall Street expectations by roughly 10%.

Looking ahead, Rivian is confident in its goal to manufacture a total of 50,000 vehicles for the entire year. Given the second-quarter production rate and assuming it continues into the third and fourth quarters, Rivian is projected to produce around 51,000 units by year-end.

Investors are particularly interested in updates regarding production outlook and cost management. A clear indication that costs are being effectively managed is crucial to investor confidence. In Q1, Rivian utilized $1.8 billion in cash. However, expectations for Q2 suggest that this figure will decrease to approximately $1.5 billion, with a combined total of around $2.8 billion for the third and fourth quarters.

Rivian currently holds $12 billion in cash reserves, which is sufficient to cover expenses for a couple of years at the current rate of consumption. However, any efforts by management to reduce cash burn rate will be seen favorably by investors.

In terms of sales and earnings, analysts predict a per-share loss of $1.43 from sales amounting to $1.1 billion. Comparatively, in the same period last year, Rivian reported a per-share loss of $1.62 from sales of just $95 million. While earnings are important, sales growth plays a more significant role in evaluating the potential of start-up stocks.

Rivian's management will be hosting a conference call at 5 p.m. Eastern time to discuss the second-quarter results.

Written by Al Root