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Rivian stock analysis. Ticker: $RIVN

Electric vehicle company Rivian just reported earnings and shares tumbled 26%. The stock is now down 90% from its first day of trading back in 2021. At the latest price, Rivian now has a market cap of 11 billion dollars and an enterprise value of 6.1 billion.

Looking at the fundamentals, it’s not hard to see why Rivian has collapsed. Gross margins are negative 46%. In 2023, the company lost more than $43,000 dollars for every car it sold. It burned 5.9 billion of cash for only 4.4 billion of sales.

But in a sense those numbers shouldn’t be a surprise. Automobile manufacturing is a capital-intensive effort that requires significant investment and years of losses. Tesla, after all, took 18 years before it could report a full-year of profit. And so Rivian can be expected to burn billions more dollars as it builds out production.

Next month, Rivian will be launching an SUV and management thinks it can get to positive gross margins in the fourth quarter. And the company’s biggest advantage is a partnership with Amazon for commercial vans which provides better profit margins than its consumer business.
Unfortunately, however, that’s where the good news ends.

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