RIVN - Rivian Shows Silver Linings Before Earnings

2024-04-29 08:30:02 ET

Summary

• Rivian is facing strong competition in the EV segment as Tesla and other companies have announced big price cuts to attract customers.
• Rivian has cash reserves of $9.4 billion at the end of 2023 while it produced 57,000 cars in 2023.
• Higher cash reserves compared to current delivery volumes give Rivian flexibility for additional discounts, like they gave on Earth Day.
• The company is also cutting costs and improving supply chain, which should help it achieve positive gross profit by the end of the year.
• Rivian’s PS ratio is quite attractive considering the revenue base of the company and forward growth runway.

Rivian ( RIVN ) along with the entire EV industry is going through a trial by fire. The next earnings will be reported on 7th May. The high-interest rate environment has already dented demand and at the same time, the supply of EV vehicles has increased significantly due to intense competition. The EV supply from China is also heating up , which has forced other automakers to give bigger discounts to retain customers. The European market is especially suffering from the rapid influx of Chinese auto brands. According to Financial Times , Chinese-made EVs will grab a staggering 25% of EV market in the European market this year....

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