Rivian Missed Delivery Estimates. What Does That Mean for RIVN Stock? thumbnail

Rivian Missed Delivery Estimates. What Does That Mean for RIVN Stock?

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Rivian (RIVN) car manufacturing plant. Rivian develops vehicles, products and services related to sustainable transportation.

Source: James Yarbrough / Shutterstock.com

Rivian (NASDAQ:RIVN) stock is in full focus today after the electric vehicle (EV) company released its fourth-quarter delivery figure. For the period, Rivian delivered 8,054 vehicles and manufactured 10,020 vehicles. That brought full-year delivery and production to 20,332 vehicles and 24,337 vehicles, respectively. The company produced the vehicles at its plant in Normal, Illinois.

Full-year production just barely missed Rivian’s internal estimate of 25,000 vehicles by about 2.6%. At the beginning of 2022, Rivian initially set its production guidance to 50,000 vehicles for the year. However, that was cut in half in March due to supply-chain challenges.

There’s a slight caveat here, however. In an email sent to employees, CEO RJ Scaringe noted that Rivian’s Normal facility actually manufactured 25,051 vehicles in 2022. However, only 24,337 vehicles were “factory-gated,” or approved for sale for customers. The vehicles that make up the difference between these two figures were awaiting additional parts and software validation.

So, what does this mean for RIVN stock?

RIVN Stock Falls on Production Miss

Rivian may have fallen short on production, but its miss wasn’t as significant as EV leader Tesla’s (NASDAQ:TSLA) miss. During Q4, Tesla delivered 405,278 vehicles. Analysts had expected an average of 420,760 vehicles. That represents a miss of about 3.7%.

During Q3, Rivian produced 7,363 vehicles, meaning that Q4 production was up 36% quarter-over-quarter. That demonstrates a noticeable ramp-up in production, which is a key focus for emerging EV companies.

Following the release of deliveries, Wall Street analysts remain optimistic about Rivian’s long-term potential. Wolfe Research reiterated its “outperform” rating and $40 price target for RIVN stock. Analyst Rod Lache believes that demand is high while profitability still remains an issue:

“Overall, with 114,000 R1 (Pickup and SUV) and close to 100,000 EDV units in backlog as of Q3, Investors aren’t questioning Rivian’s demand/revenue prospects. The bigger issue has been conviction in this company’s earnings prospects (losses were $77,000 per vehicle in Q3).”

Meanwhile, Truist Securities reiterated its “buy” rating and cut its price target to $50 from $65. Analyst Jordan Levy believes that the delivery miss may already be priced in, especially when considering that RIVN fell yesterday due to Tesla’s miss. Like Lache, the analyst believes that demand isn’t an issue for the company. For fiscal 2023, Levy forecasts $5.3 billion of revenue.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.