Rivian’s Q4 Earnings Call — Everything You Need to Know

Last year’s biggest IPO, Rivian (NASDAQ: RIVN), reported its highly anticipated fourth-quarter 2021 earnings yesterday evening. The company had already slid to an all-time low prior to the call and only sank further once its books were revealed to the world.

The firm is now trading at close to half of its initial IPO price of $78 and well off its all-time high of $179.47.

What did Rivian report in its earnings call?

Rivian posted an adjusted loss per share of $2.43 versus an expected loss of $1.97, on revenue of $54 million against an anticipated $60 million. The fourth quarter also marked significantly widening losses for the firm, with $2.5 billion of the company’s $4.7 billion annual net loss occurring in the year’s final quarter.

Revenue guidance for 2022 was withheld, but the company ended the year with $18.4 billion worth of cash available to spend.

As has become typical this earnings season, the outlook for the coming year is where the company truly fell short. Rivian warned that it would have to cut its production targets in half for 2022. Supply chain issues were named as a “fundamental limiting factor” that has seen targets slashed to just 25,000 units. According to CEO, RJ Scaringe,

“We are no doubt experiencing one of the most challenging supply chain environments the automotive industry has ever seen.”

So, should I buy Rivian stock?

It’s tough to truly ascertain Rivian’s true value to investors right now. Widening losses and weakening production targets are both significant red flags, but the company has undoubtedly suffered due to situations largely outside of its own control. Rivian delivered a total of 920 vehicles in 2021, with 909 of those being delivered in the fourth quarter. Scaling up to 25,000 for 2022 would mark a huge improvement — and that’s with production targets already halved.

High demand for its trucks, coupled with a significant deal with Amazon to provide delivery vans, leaves Rivian poised to make a big splash in the electric vehicle (EV) market if it can scale its production properly. However, there remain some notable big players in the industry who have the capacity to produce vehicles at a rate far outside of Rivian’s reach. Tesla and Ford both possess infrastructure that Rivian can’t possibly hope to match right now.

Rivian still has a chance to carve out a sizeable niche in the EV space, but investors are unlikely to wait around for too long when more and more legacy auto manufacturers are pivoting towards electric cars. It needs to begin hitting targets or else it will simply be left behind.