The electrical automobile maker nonetheless has quite a bit to show.
Rivian (RIVN -2.28%) posted its second-quarter earnings report on Aug. 5. The electrical automobile maker’s income rose 13% 12 months over 12 months to $1.3 billion, exceeding analysts’ expectations by $10 million. Its whole deliveries declined 23% to 10,661 automobiles, however it offset that strain with rising software program and repair revenues.
Sadly, its gross margin — which turned inexperienced within the first quarter of 2025 — turned purple once more within the second quarter. It solely produced 5,979 automobiles throughout the quarter, which marked a 38% drop from a 12 months in the past. It narrowed its web loss from $1.5 billion to $1.1 billion, however its lack of $0.80 per share nonetheless missed the consensus forecast by $0.16.
Picture supply: Rivian.
Rivian’s combined numbers did not impress the market, and the inventory stays 30% under its 52-week excessive of $17.15 on Could 20. Do you have to purchase it earlier than it bounces again?
Why is not Rivian impressing buyers?
Rivian sells three sorts of EVs: the R1T pickup, the R1S full-size SUV, and electrical supply vans for its high investor Amazon and different prospects. Earlier than its IPO in November 2021, Rivian claimed it may produce 50,000 automobiles in 2022. However that is what truly occurred over the the previous three and half years:
Metric
2022
2023
2024
1H 2025
Automobiles produced
24,337
57,232
49,476
20,590
Automobiles delivered
20,332
50,122
51,579
19,301
Income
$1.66 billion
$4.43 billion
$4.97 billion
$2.54 billion
Web loss
($6.75 billion)
($5.43 billion)
($4.75 billion)
($1.66 billion)
Information supply: Rivian.
Rivian grappled with provide chain constraints in 2022. Its manufacturing and deliveries accelerated in 2023 because it overcame these challenges, however its enlargement stalled out once more in 2024 as rising rates of interest chilled the high-end EV market, extra opponents carved up the market, and it quickly shut down its primary plant to improve its manufacturing strains.
For 2025, it expects to solely ship 40,000 to 46,000 automobiles. Analysts count on its income to rise 6% to $5.29 billion because it barely narrows its web loss to $3.7 billion. It blames that slowdown on ongoing provide chain challenges, increased tariffs on uncooked supplies and batteries, and one other shutdown of its primary plant because it gears up for the rollout of its smaller R2 SUV in 2026. That dim near-term outlook is weighing down Rivian’s inventory.
May Rivian be a deep worth play?
Rivian is struggling to scale up its enterprise, however it expects the R2’s launch to draw a wider vary of shoppers. It additionally plans to maintain promoting its regulatory credit to different automakers whereas increasing its software program and companies section to spice up its gross margin.
On the finish of the second quarter, it nonetheless had $8.52 billion in whole liquidity — together with $7.51 billion in money, money equivalents, and short-term investments. That money ought to carry it by the launch of the R2 and assist it ramp up manufacturing because the macro surroundings improves. If it might pull that off, analysts count on Rivian’s income to rise 34% to $7.1 billion in 2026 and develop one other 52% to $10.8 billion in 2027. Additionally they count on it to step by step slim its web losses.
With an enterprise worth of $13.2 billion, Rivian trades at simply 2 instances subsequent 12 months’s gross sales. That makes it appear like a price play in comparison with Tesla, which trades at 9 instances subsequent 12 months’s gross sales. Due to this fact, any constructive information may trigger Rivian’s inventory to double or triple — and it might nonetheless be thought of moderately valued relative to its progress potential. That is perhaps why insiders purchased barely extra shares than they offered over the previous 12 months. Amazon additionally hasn’t offered any of its shares in Rivian since its IPO, and Rivian continues to be supported by different massive buyers like Porsche and the Saudi Arabian conglomerate Abdul Latif Jameel.
Rivian continues to be a extremely speculative inventory, and there isn’t any assure it might overcome its rising pains and evolve into one other EV big like Tesla. But when it will get its act collectively, expands its addressable market with the R2, and ramps up manufacturing, it may finally command a a lot increased valuation. So in case you have religion in Rivian’s long-term progress plans, then it is price accumulating whereas it trades thus far under its 52-week excessive.
Leo Solar has positions in Amazon. The Motley Idiot has positions in and recommends Amazon and Tesla. The Motley Idiot recommends Porsche Automobil Se. The Motley Idiot has a disclosure coverage.
