Does Lucid’s Miss Mean Rivian (RIVN) Stock Is Doomed?

  • Lucid's (LCID) lackluster earnings have imposed fear on Rivian (RIVN) stock shareholders.
  • However, Rivian appears to be in a much better position than Lucid.
  • Shares of RIVN stock are down more than 60% year-to-date (YTD).
The back of a silver Rivian pick-up truck.
Source: Miro Vrlik Photography / Shutterstock.com

Shares of Lucid (NASDAQ:LCID) stock closed lower by nearly 10% today after the electric vehicle (EV) company reported lackluster second-quarter earnings. Now, some Rivian (NASDAQ:RIVN) stock investors are concerned their company may experience the same fate.

For the period, Lucid reported delivery of 679 vehicles, with revenue of $97.3 million. That revenue figure came in below the consensus analyst estimate of $145.5 million.

In the first half of the year, Lucid has now produced a total of 1,405 vehicles. Furthermore, the company has lowered its full-year production guidance from between 12,000 to 14,000 vehicles to between 6,000 and 7,000 vehicles. Previously, Lucid had even issued full-year guidance of 20,000 vehicles. Lucid attributes this decline to a shortage of raw materials, such as glass and carpet. Finally, the company’s order backlog sits at 37,000 vehicle reservations.

Last month, Rivian confirmed that it will report earnings on Aug. 11 after market close. Should RIVN investors be worried about the upcoming report? Let’s get into the details.

RIVN Stock in Focus Following Lucid’s Earnings

Side by side, Rivian appears to be in much better financial health than Lucid. As of Q1, Rivian had 16.43 billion in cash and cash equivalents on hand. In Q2, Lucid reported just $4.6 billion of cash, cash equivalents and investments. This should be able to help fund Lucid “well into 2023,” which isn’t saying much. As a result, LCID stock investors should be prepared for an equity offering in the upcoming year.

Meanwhile, Rivian has produced 8,000 vehicles as of June 30 compared to Lucid’s 1,405 vehicles. Rivian’s preorder backlog of 90,000 preorders also trumps the rival’s Q2 figure of 37,000 reservations. Rivian’s backlog is accurate as of May 9 and should increase once it reports earnings.

That said, both companies do boast massive orders from significant customers. Lucid has an up to 100,000 vehicle order from Saudi Arabia that is set to be fulfilled over the next 10 years. Equally impressive, Rivian has signed an agreement with Amazon (NASDAQ:AMZN) to deliver 100,000 electric delivery vans by 2030.

To top if off, Rivian has maintained its production guidance of 25,000 vehicles so far, although this may change when it reports earnings. Now at 6,500 estimated vehicles — the midpoint of Lucid’s production guidance — Rivian will produce 284% more vehicles than its competitor this year.

Both companies have stated that ramping up production is their primary goal. There’s no question that Rivian has the advantage over Lucid in this aspect — and many others.

On the date of publication, Eddie Pan held a long position in AMZN. 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.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/does-lucids-miss-mean-rivian-rivn-stock-is-doomed/.

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