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Rivian Shares Fall After Earnings on Muted R1T Delivery Outlook

Rivian shares fall after the highly-touted electric pickup truck maker provides a more muted R1T delivery outlook amid supply chain and production issues.

Rivian  (RIVN) - Get Rivian Automotive, Inc. Class A Report shares fell on Friday, dropping nearly 10% in premarket trading, after the highly-touted all-electric pickup truck maker reported its first quarterly earnings as a public company and provided more clarity on future orders – which in turn prompted investors to re-assess the company’s current lofty stock-price valuation.

Rivian said it lost an adjusted $766 million in the third quarter, without providing a per-share number. Analysts polled by Factset had been expecting a meager $900,000 in sales for the quarter, with a loss of $12.04 a share.

While Rivian confirmed strong interest in its RIT electric truck with more than 71,000 pre-orders as of Dec. 15, executives noted in a post-earnings conference call that supply chain issues affecting the automotive industry as a whole among other sectors mean customer orders placed now will not likely be delivered until 2023.

“The good news is that we do not believe any of our supply-chain challenges are long term,” CEO RJ Scaringe said on the call. “They are solvable problems,” he said, adding that labor shortages and start-up production challenges also impacted results.

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As of Dec. 15, Rivian produced 652 R1Ts and delivered 386, making them a rare bird on the roads. It also produced and delivered its first two R1S models, a three-row seven-passenger SUV. Volume production of the R1S is slated for the spring, Rivian said.

"The Street will be disappointed to see a delivery shortfall, however this is a supply issue and clearly not a demand issue for Rivian which remains the linchpin to our bull thesis over the next 12 to 18 months," Wedbush Securities analysts Dan Ives wrote in a research note on Friday. 

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"That said, with a lofty valuation relative to near-term numbers, the last thing the Street wanted to see for Rivian was a curtailing of growth/deliveries right out of the gates," even as the company addresses supply with the ground-breaking of a new second U.S. factory in Georgia,"...which will be a key production artery for the company over the coming years," Ives said. 

He has an outperform rating on the stock and a one-year price target of $130.

Shares of Rivian at last check were down 9.52% at $108.87.

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"We think the R1T/R1S is the most capable/desirable product in the market for about $80,000," Morgan Stanley analyst Adam Jonas wrote in a recent research note, saying Rivian is "the one" that can challenge Tesla. Jonas initiated coverage of Rivian stock with an overweight rating and $147 price target.

Earlier this week, MotorTrend crowned the Rivian R1T its 2022 Truck of the Year, naming the first mass-produced electric truck to hit the U.S. market "the most remarkable truck MotorTrend has ever driven."

The Tesla competitor backed by Amazon went public last month in an IPO that valued the company at more than $90 billion, above both Ford F and General Motors GM.