Rivian (RIVN) positive gross margins unlikely by end of 2024: Truist Securities
Rivian's (NASDAQ:RIVN) vehicle production and deliveries in the third quarter fell below expectations, and while the electric truck maker noted that its Q3 figures were adversely affected by a supply shortage, RIVN stock saw a 3.15% drop on Friday trading. In response to Rivian's Q3 results, Truist Securities has noted that it would now be unlikely for the EV maker to achieve positive gross margins by the end of 2024.
Rivian stated in its Q3 2024 vehicle production and delivery report that it produced 13,157 and delivered 10,018 vehicles in the third quarter. The company also noted that it was revising its annual production guidance to between 47,000 and 49,000 vehicles, down from the 57,000 units that it reaffirmed in August. Rivian, however, maintained its delivery target of 50,500 to 52,000 vehicles for 2024.
Rivian is expected to release its Q3 2024 financial results on November 7, 2024. Expectations are high that the company will discuss its updated FY 2024 targets in its upcoming earnings call. As per a Yahoo Finance report, Rivian forecasted a loss of $2.7 billion in adjusted EBITDA and $1.2 billion in capital expenditures in August. At the time, Rivian noted that it could achieve positive growth margin during Q4 2024.
While the Street was disappointed in Rivian's results, Truist reaffirmed its "Hold" rating and $16 per share price target for RIVN stock. The firm noted that Rivian's Q3 2024 results fell 10%-15% below the consensus estimates. It also questions the company's capability to achieve its gross margin targets for the year.
"The company made no mention of the target for positive gross margins by year-end, but this is now seen as unlikely, assuming the shortage doesn't improve in the very near term," Truist noted.
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