Why Is Rivian (RIVN) Stock Heating Up Over 10% Today?

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  • Rivian (RIVN) reported a lower-than-expected loss and the stock rose.
  • It is slowing capital spending but reaffirmed its production guidance.
  • There are 214,000 orders while it builds a Georgia factory that can make 400,000 vehicles per year.
RIVN stock - Why Is Rivian (RIVN) Stock Heating Up Over 10% Today?

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Rivian Automotive (NASDAQ:RIVN) stock rose sharply overnight after reporting September quarter results that were not as bad as expected.

The gain slightly exceeded a loss of 12% suffered on Nov. 9 in anticipation of bad news. Rivian is now down 68% for 2022, against a loss of 56% for Tesla (NASDAQ:TSLA).

Rivian said it lost an adjusted $1.44 billion, $1.57 per share, during the September quarter, on revenue of $536 million. The company said it made 7,363 vehicles, up 67% from the previous quarter. The loss was less than the $1.7 billion anticipated.

The media reported the quarter as both good and bad news.

Why the Pop?

Today, on Nov. 10, investors are focused on the future.

Rivian reaffirmed its production target of 25,000 vehicles for 2022 and said it has $13.8 billion in cash, enough to keep it going through 2025. Rivian also said it has 114,000 orders for its R1 electric truck, up from 98,000 claimed on Aug. 11. This is on top of the 100,000 electric vans it still plans to deliver to Amazon (NASDAQ:AMZN).

Rivian is slowing its capital spending by $250 million this year, to $1.75 billion, and adding a second shift to its Illinois factory. This means its Georgia factory, announced with great fanfare and tax breaks last December, will likely be delayed. The new Peach State plant is expected to employ 7,500 people and make 400,000 cars per year.

The overnight gain after earnings was in contrast to rival Lucid Group (NASDAQ:LCID), which plunged about 15% after reporting its reservations for cars fell during the quarter.

RIVN Stock: What Happens Next?

Rivian is considered the strongest of the U.S. electric vehicle stocks, next to Tesla. But that’s not the same thing as calling it a strong stock.

If inflation drops and the economy recovers quickly, however, Rivian should be OK. It seems to have enough capital, enough orders, and enough government aid to get through a short recession.

On the date of publication, Dana Blankenhorn held a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2022/11/why-is-rivian-rivn-stock-heating-up-over-10-today/.

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