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Rivian boosts its presence in electric vehicle market

Rivian fundamental and technical analysis ahead of 21 February Q4 earnings.

Electric vehicle sign Source: Bloomberg

​​​Rivian boosts its presence in electric vehicle market

​Rivian has been boosting its output of vehicles, though upcoming earnings on 21 February are still expected to show further losses for the firm.

​As an emerging player in the electric vehicle (EV) market, Rivian Automotive, has captured the attention of both consumers and investors alike. With the announcement that it produced 13,992 vehicles in the second quarter (Q2) and delivered 12,640 of them to customers, Rivian is setting a brisk pace in the industry. The company's ambitious goal to produce 50,000 vehicles in 2023 would mark a substantial increase from the previous year's output, signalling a significant step in Rivian's growth trajectory.

​For traders watching Rivian, the company's production capabilities are a key indicator of its potential to capture market share in the rapidly expanding EV sector. Doubling production, as Rivian aims to do, is not only a testament to the company's operational capabilities but also a crucial factor in maintaining investor confidence. Keeping to its production guidance is essential to ensure that investor sentiment remains positive and to avoid any potential unease in the market.

​Cost management is another critical area under the microscope. As Rivian scales up production, investors are keenly observing how the company is managing its expenses. Given that Rivian is still experiencing considerable cash burn, the way in which it controls costs while expanding its operations will be a determinant of its long-term financial health. Rivian has projected annual earnings before interest, taxes, depreciation and amortisation (EBITDA) losses of around $4.3 billion for 2023 and anticipates a cash burn of over $1 billion in its Q2. Despite these figures, Rivian's substantial cash reserves of $12 billion suggest that the company is well-positioned to cover its expenses in the short to medium term.

​Wall Street analysts have set high expectations for Rivian, anticipating quarterly revenue to surpass the $1 billion mark for the first time. However, they also forecast adjusted EBITDA of $1.1 billion and a net loss of $1.47 billion.

​Analyst ratings for Rivian

​Refinitiv data shows a consensus analyst rating of ‘buy’ for Rivian with 5 strong buy, 12 buy and 10 hold, with an upside target at $24.52, a 50% rise from current levels (as of 16 February 2024).

RIVIAN analyst Source: Refinitiv
RIVIAN analyst Source: Refinitiv

​Technical analysis of the Rivian share price

​Rivian’s share price, which has fallen by 22% year-to-date, is quite volatile but has been holding above its April-to-February uptrend line at $14.59 for the past four weeks.

​Rivian Weekly Candlestick Chart

RIVIAN weekly chart Source: TradingView
RIVIAN weekly chart Source: TradingView

​On the daily chart the Rivian share price sideways trading range can be seen more clearly with the late-January and current February highs at $16.84 to $16.86 providing the upper boundary of this trading band.

​At least a daily chart close above $16.86 will need to be seen for the Rivian share price to rise back towards its 55- and 200-day simple moving averages (SMA) at $18.44 to $18.95.

​Rivian Daily Candlestick Chart

RIVIAN daily chart Source: TradingView
RIVIAN daily chart Source: TradingView

​Were this year’s swift decline to continue, however, and a fall through the late January low at $14.59 be seen, the mid- to late June lows at $13.61 to $13.30 would be back in sight.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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