RIVN Stock Alert: Rivian Falls After Recalling 13,000 EVs

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  • Rivian (RIVN) will recall nearly 13,000 vehicles due to a passenger side airbag issue.
  • The electric vehicle company reported Q4 revenue of $663 million, below the analyst expectation for $742.4 million.
  • RIVN stock is down by more than 15% today.
RIVN stock - RIVN Stock Alert: Rivian Falls After Recalling 13,000 EVs

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Shares of Rivian (NASDAQ:RIVN) opened lower by about 8% after the electric vehicle (EV) company announced its fourth-quarter earnings and disclosed a recall of up to 12,176 2022 R1Ts and R1Ss. RIVN stock is now down by more than 17%.

The National Highway Traffic Safety Administration (NHTSA) explained:

“A faulty automatic locking retractor sensor in the front passenger seat belt system may incorrectly report as ON when it is actually OFF, causing the suppression or improper deployment of the air bag.”

Affected customers have been advised to take their vehicles to Rivian Service Centers and pop-up locations to receive a fix with no appointment necessary.

According to NHTSA, the 2022 Rivian R1T has received 11 complaints and four recalls, while the 2022 Rivian R1S has received zero complaints and three recalls. Both EVs have had one investigation opened against them.

RIVN Stock: Rivian Discloses Recall and Disappointing Earnings

Meanwhile, Rivian reported its fourth-quarter earnings after the market close yesterday. Revenue came in at $663 million, trailing below the analyst estimate for $742.4 million. Adjusted earnings per share (EPS) was a loss of $1.73, which also came below the analyst estimate for $1.94. Furthermore, adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) tallied in at a loss of $1.46 billion compared to a loss of $1.11 billion a year ago.

Unprofitability was expected, as Rivian is currently in the capital-intensive process of ramping production. In 2022, the company produced a total of 24,337 vehicles, just below its internal guidance for 25,000 vehicles. Deliveries for the year totaled 20,332 vehicles. For 2023, Rivian has a goal of producing 50,000 vehicles, while analysts were expecting around 60,000 vehicles.

Rivian noted that supply chain issues continue to be prevalent, adding:

“Supply chain continues to be the main limiting factor of our production; during the quarter we encountered multiple days of lost production due to supplier shortages. We expect supply chain challenges to persist into 2023 but with better predictability relative to what was experienced in 2022.”

On the bright side, Rivian is sitting on $12.1 billion of cash, cash equivalents and restricted cash. This will allow it to ramp production without issuing additional equity or debt in the near term. On top of that, Needham announced that it had reinstated coverage of RIVN with a “buy” rating and a price target of $26.

On the date of publication, Eddie Pan 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. 


Article printed from InvestorPlace Media, https://investorplace.com/2023/03/rivn-stock-alert-rivian-falls-after-recalling-13000-evs/.

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