All eyes are on Rivian (NASDAQ:RIVN) after the company confirmed that it will report Q2 earnings on Aug. 11 after market close. However, RIVN stock shareholders are a bit concerned following the release of Lucid’s (NASDAQ:LCID) earnings report. Notably, the luxury electric vehicle (EV) company reduced its full-year production guidance from between 12,000 and 14,000 vehicles to between 6,000 and 7,000 vehicles. At the midpoint, production guidance was lowered by a significant 50%. Rivian currently has full-year production guidance of 25,000 vehicles.
In late July, Rivian announced that it would lay off about 6% of its 14,000 employee workforce. While this may appear bleak from the outside, the layoffs will reduce expenses so Rivian can continue operating without raising additional funds. CEO RJ Scaringe added:
“Over the last six months, the world has dramatically changed with inflation reaching record highs, interest rates rapidly rising and commodity prices continuing to climb — all of which have contributed to the global capital markets tightening.”
With that in mind, let’s take a look at three metrics investors should look out for when Rivian reports earnings.
3 Key Metrics to Watch When Rivian Reports Earnings
As of May 9, Rivian had 90,000 preorders for its R1 vehicles. As of June 30, it had produced 8,000 vehicles. The preorders do not include a 100,000 vehicle order from Amazon (NASDAQ:AMZN), which is set to be completed by 2030.
For Q2, analysts expect the company to post revenue of $337.98 million. The low estimate falls at $294.2 million, while the high estimate is $378 million. Meanwhile, analysts expect an earnings per share (EPS) loss of $1.63, with the low and high estimates at a loss of $1.93 and $1.46, respectively.
Meanwhile, the most important metric to watch may be full-year production guidance. Shares of LCID stock sank after the company reported a reduction in guidance, and the same should happen to Rivian if this occurs. Still, Rivian appears to be in much better financial health than Lucid.
For Q3 guidance, analysts are expecting revenue of $592.6 million and an EPS loss of $1.60.
Rivian currently has plans to build a second $5 billion manufacturing facility in Georgia. This facility will aid in producing the R2, an upcoming platform of vehicles that will be cheaper than current models. RIVN shareholders should expect to hear updates on the R2 plan during earnings.
The company previously stated that it expects the R2 platform to launch by 2025, driven by its $17 billion of cash on hand as of March 31.
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.
