Rivian earnings: Investors are looking for any signs of improvement for production

The unveiling of a cheaper EV would help, but that’s not on the immediate horizon. Meanwhile, the EV maker is struggling with the production ramp and margins for the vehicles it already sells.

“On Rivian’s release, investors are looking for signs of improvement from its sluggish first-quarter production and delivery numbers, which were down from its fourth-quarter totals, and has contributed to bearish sentiment toward the story,” Garrett Nelson, an analyst with CFRA, said.

“The key question is whether Rivian’s 2023 production guidance of 50,000 units is achievable,” Nelson said.

Another special look will go to Rivian’s order book and any potential cancelations, and the company’s path toward gross profits longer-term. All this is against a backdrop of “escalating liquidity concerns” among other EV peers, Nelson said.

Here’s what to expect:

Earnings: Analysts polled by FactSet expect Rivian to report an adjusted loss of $1.61 a share in the first quarter, compared with an adjusted loss of $1.42 a share in the first quarter of 2022. Rivian has yet to turn a profit.

Estimize, a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others, expects a loss that is a tad wider, at $1.62 a share.

Revenue: The analysts surveyed by FactSet are calling for sales of $657 million for Rivian, which would compare with $95 million in the first quarter of 2022. Estimize sees Rivian posting slightly higher revenue, at $671 million.

Stock price: Rivian shares have lost about 62% in the past year, compared with losses of around 6% for the S&P 500. SPX, -0.52%

That underperformance holds in the year-to-date: Rivian is down 30% so far this year, contrasting with gains of around 6% for the broader index.

Rivian is trading more than 80% lower than its upsized initial public offering price of $ 78 a share in November 2021.

What else to expect: Rivian’s Chief Executive RJ Scaringe said in a letter to shareholders earlier this month that the “primary lever” that Rivian can pull to improve its prospects is to ramp up production and optimize its factory capacity and the fixed costs that go with it.

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Scaringe said that Rivian’s 2023 production guidance of 50,000 vehicles remained on track, which would be double the 2022 production. “We have deepened and extended our relationships with key suppliers that support our ramp,” he wrote. The CEO also promised to continue to keep an eye on costs.

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Wall Street will also want to hear more about Rivian’s next-generation vehicles, to be built on its new R2 platform. Rivian has said it is developing the new platform to achieve “a dramatically lower cost structure,” using what it learned with its first platform.

A narrower loss for Rivian on Tuesday may not propel the stock forward.

Earlier this week, Ford Motor Co. F, -1.61% reported first-quarter earnings above Wall Street expectations, but the stock headed lower as investors worried that the unchanged guidance signaled bigger problems in the second half of the year.

” We’re very much in a ‘glass half empty’ market environment, where investors seem to be disregarding positive news and punishing stocks for any negatives,” CFRA’s Nelson said.