Despite Rivian Automotive’s (NASDAQ: RIVN) weak showing in its 2022 Q1 earnings report, Wedbush analysts remain bullish on the automaker in the long term. However, the team of financial experts, led by Dan Ives, said the excuses from Rivian explaining its bottlenecks need to stop, as it has been “a case study for what NOT to do” when starting an EV company.
“To say the Rivian story has been disappointing to us (and the Street) so far would be an understatement,” Ives said in the note. “We believe Rivian, from a core engineering and design perspective along with the Amazon commercial relationship, has potential to be a major EV stalwart over the next decade. However, for that to happen, they need to start delivering models to customers and stop the excuses.”
After reporting misses in both revenue and earnings per share losses on Wednesday during its Q1 Earnings Call, Rivian reported it is still struggling with supply chain holdups from suppliers. The lack of necessary parts to build the R1T all-electric truck, for example, has caused extended production pauses, but that is not what investors want to hear.
“Every quarter, it’s been one thing after another besides the debacle price increase (which was taken back 24 hours later) soap opera,” Ives said in the note about Rivian, who issued its first recall with the NHTSA due to a faulty seat sensor earlier this week.
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Despite the weak quarter, Rivian still managed to deliver over 1,200 vehicles, and ownership experiences have appeared to be relatively positive. However, Wedbush’s perspective on the company is that it is a “long-term winner” in the EV space. Ives lowered his outlook on Rivian stock following the lackluster earnings report from $60 to $30 per share. He maintained his ‘Outperform’ rating on Rivian shares.
Disclosure: Joey Klender is not a Rivian shareholder.
Keyword: Wedbush calls Rivian a ‘long term winner,’ but admits it needs to ‘stop the excuses’