Rivian (NASDAQ:RIVN) is gearing up to report its fourth-quarter 2022 earnings on Feb. 28 and investors are watching closely. The electric vehicle (EV) innovator has struggled considerably throughout the previous year, and RIVN stock is currently down 72% year-over-year (YOY). Yet multiple experts have expressed bullish takes on the shares, naming the company as the most likely automaker to threaten Tesla’s (NASDAQ:TSLA) leading role in the EV race.
Questions have abounded recently as to whether Rivian is the next Tesla. These earnings will likely offer some insight into the answer. Shares have been falling all week as Wall Street prepares for the earnings report that will reveal how the company really performed in 2022 as the bear market took hold.
What exactly should investors be expecting when Rivian reports Q4 earnings on Tuesday? Let’s take a closer look at what Wall Street is predicting and what’s likely to happen.
What’s Happening with RIVN Stock
As noted, this year hasn’t started off well for Rivian. While shares attempted to rally this morning, they failed to garner the necessary momentum to pull into the green. As of this writing, RIVN stock is down 5% for the day and its current trajectory doesn’t hint at a turnaround. This comes on the heels of an even more difficult week, during which shares have fallen by 15%.
Rivian has a chance to turn things around if it surprises Wall Street with better-than-expected earnings. But just what are these predictions that the company needs to beat? Per Zacks Equity Research:
“Wall Street expects a year-over-year increase in earnings on higher revenues when Rivian Automotive (RIVN) reports results for the quarter ended December 2022. While this widely-known consensus outlook is important in gauging the company’s earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.”
How likely is it Rivian will deliver on these important metrics? Some experts are far from optimistic its earnings will signal the turnaround the stock needs.
InvestorPlace’s Louis Navellier still leans bearish on the stock, warning investors Feb. 28 might not bring the good news they are looking for. He believes “there’s a lot out there that could cause Rivian’s latest reservation figure to fall short of expectations,” citing concerns regarding production, competition and macroeconomic factors that could negatively impact EV demand. As Navellier sees it, the downside risk from a disappointing earnings or guidance release outweighs any possibility Rivian will exceed Wall Street expectations.
The Road Ahead
It doesn’t help Rivian that fellow EV innovator Lucid (NASDAQ:LCID) recently failed to meet revenue expectations, pushing EV stocks down across the board. However, that doesn’t mean Rivian can’t surprise investors and push past expectations.
Institutional investment in RIVN stock remains strong, and billionaire hedge fund manager Paul Tudor Jones recently made a significant bet on it. The company still holds a “moderate buy” consensus on TipRanks, with ten Wall Street analysts maintaining “buy” ratings.
Rivian also reported good production numbers for Q4 2022, completing 10,000 vehicles, a quarter-over-quarter (QOQ) increase of 36%. While the company does have cash burn problems to address, it also has the potential to surprise the skeptics and blow past expectations. If it does, RIVN stock will soar. It it doesn’t, investors may seize the opportunity to buy the dip before the new bull market takes over.
On the date of publication, Samuel O’Brient did not hold (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.