Investors were hoping Rivian’s (NASDAQ:RIVN) first-quarter deliveries report would give the stock a much-needed boost. Instead, RIVN stock is moving in reverse — with the market-wide decline undoubtedly weighing on the electric-vehicle (EV) maker’s share price.
In the first quarter, the company was able to produce 2,553 EVs, while delivering 1,227 vehicles to customers. According to the company, production remains on track with expectations:
“These figures are in line with the company’s expectations, and it believes it is well positioned to deliver on the 25,000 annual production guidance provided during its fourth quarter earnings call on March 10, 2022.”
At the end of 2021, the company reportedly had 83,000 reservations, giving it a large potential customer base to work with. Despite this, though, Rivian has been slow to get going. The automaker faced numerous supply-chain-related issues and had to walk back a controversial price hike. Furthermore, it lost $2.5 billion last quarter.
Despite all this, Rivian remains optimistic that it will hit its adjusted 2022 expectations.
Rivian is a bit different from the other new EV producers. The company counts Amazon (NASDAQ:AMZN) as an investor, the latter of which has an 18% stake. The company also has a deal to build 100,000 electric delivery vans for Amazon. Additionally, Rivian recently took the title of being the first automaker to deliver a fully electric truck — the R1T pickup.
So, Rivian has positives working in its favor. That said, not everything is perfect.
Competition is set to increase with the introduction for Ford’s (NYSE:F) F-150 Lightning and General Motor’s (NYSE:GM) electric Silverado. Moreover, earlier this year, it was announced that Amazon will be “the first commercial customer of Stellantis’ Ram ProMaster battery-electric vehicle.” While that’s not a nail in the coffin for Rivian, it did pour some cold water on the bull case.
Finally, there have been concerns about the automaker’s valuation. At one point, RIVN stock sported a market capitalization of more than $100 billion. That was despite little to no revenue and only estimates on the future.
Since then, though, we’ve seen a large reduction in RIVN stock, with shares currently down 73% from the November high. Will that be enough to attract investors? Should the selling pressure and growth in EV stocks continue, investors may still be early on the automaker. That said, the average 12-month price target for RIVN stock is roughly $84 per share, implying 110% upside from current levels.
On the date of publication, Bret Kenwell did not have (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.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
