After reporting worse-than-expected earnings, Wall Street sentiment toward Rivian (NASDAQ:RIVN) stock is shifting. Indeed, Wells Fargo just reduced its price target on the electric vehicle (EV) producer from $14 to $10, although analyst Colin Langan maintained an “equal weight” rating. RIVN stock is down today on news of the mixed results, although shares are currently regaining some momentum.
This makes it difficult to properly assess RIVN, especially give the mixed nature of the recent report. But even as negative headlines dominate coverage, investors shouldn’t necessarily panic — even as Wall Street grows more bearish on the struggling EV stock.
What’s Happening With RIVN Stock?
It’s definitely a complicated time for Rivian. The firm reported Q1 revenue of $1.20 billion, an 80% increase year-over-year (YOY). However, as Yahoo Finance reports, the company also “posted a loss per share of $1.48 versus $1.27 estimated, with an operating loss of $1.484 billion compared to the $1.299 billion loss expected.”
With these mixed results, its easy to see why RIVN stock has been volatile today. But Langan has made it clear that he sees Rivian’s earnings as a negative:
“RIVN headline Q1 EBITDA beat consensus, though missed ex. special charges. The company held FY adj EBITDA guide, though now it includes special items. We est. Q1 adj gross margin per unit was ~$44.1K, down ~$3K q/q, & impacted by $9K in one-time costs. Mgmt remains focused on FCF, cutting capex guide $550M & guiding to only $1.5B in 2025. That said, cash burn remains a concern & Q4 ’24 GM breakeven targets look challenging. We remain EW & lower our px target from $14 to $10.”
Langan isn’t the only analyst who isn’t optimistic about Rivian’s prospects. Dan Levy of Barclays reiterated a “hold” rating and also holds a $10 price target. Needham lowered its Rivian stock price target as well.
Still, other analysts aren’t so easily swayed against the company. RIVN stock still has a moderate buy consensus rating based on 23 opinions, with 12 buy ratings, eight holds and three sells.
True, Rivian’s earnings may offer some cause for concern. However, because the company’s Q1 financials aren’t all bad, there’s also reason to believe Rivian can bounce back in the second half of 2024. RIVN stock has proven resilient before and the EV market seems to be making a comeback. If it does, Rivian will be among the stocks most likely to benefit and enjoy stable growth.
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.
