Tuesday after the market close, Rivian Automotive, Inc. (NASDAQ: RIVN) reported 1Q 2023 results that were by no means good but were in line with expectations. This, together with the company’s affirming its plans to produce 50,000 vehicles in 2023, caused the stock to rise about 5% to US$14.61 in after-hours trading.
Make no mistake, even though Rivian stock lifted on the earnings news, the details of the release were generally discouraging and included only a handful of fundamental positives.
One of those constructive elements is Rivian’s ability so far in 2023 to resist cutting vehicle prices. Its average revenue per vehicle delivered in 1Q 2023 was US$82,215, a figure which has held about constant since 2Q 2022. In contrast, Lucid Group, Inc. (NASDAQ: LCID), another high-profile electric vehicle start-up, saw its average realized sales prices decline 20% in 1Q 2023 versus 4Q 2022.
RIVIAN AUTOMOTIVE, INC. — Selected Financial Statistics
|(in millions of US dollars, except vehicles produced and delivered and revenue per vehicle delivered)||Full-Year 2023 Guidance||Twelve Months Ended 3-31-23||1Q 2023||4Q 2022||3Q 2022|
|Number of Vehicles Produced||50,000||31,179||9,395||10,020||7,363|
|Number of Vehicles Delivered||27,051||7,946||8,054||6,584|
|Revenue Per Vehicle Delivered||$82,215||$83,187||$82,319||$81,409|
|Operating Cash Flow||($5,539)||($1,521)||($1,446)||($1,368)|
|Cash – Period End||$11,244||$11,244||$11,568||$13,272|
|Debt and Convertible Preferred – Period End||$3,308||$3,308||$1,812||$1,761|
|Shares Outstanding (millions) – Period End||939||939||926||921|
On the other hand, Rivian’s cash burn (defined as operating cash flow minus capital expenditures) in 1Q 2023 rose to a record US$1.8 billion. For the twelve months ended March 31, 2023, the company burned through a remarkable US$6.8 billion.
Furthermore, Rivian for the second successive quarter declined to disclose the number of vehicle reservations it has received from customers. Rivian had released this data from 3Q 2021 through 3Q 2022. It seems logical to conclude the reason not to release this information is lower customer demand. (As an aside, Lucid likewise decided not to release reservation data in its 1Q 2023 financial report.)
Rivian maintained both its full-year 2023 adjusted EBITDA loss projection of US$4.3 billion and its 2023 capital spending forecast of around US$2 billion.
Rivian’s cash balance declined only US$300 million in the quarter to US$11.2 billion as of March 31, 2023 because it sold US$1.5 billion of convertible senior notes during the period. Given likely continued enormous free cash deficits for some time to come, a stock offering before year-end 2023 must be considered a possibility.
Rivian’s valuation looks markedly different based on its revenue multiple versus a cash flow analysis. Factoring in its net cash position, Rivian’s enterprise value (EV) is approximately US$5 billion. Consequently, the stock trades at a reasonable 2.25x EV-to-revenue multiple. However, Rivian’s US$5 billion valuation is much tougher to square with a projected US$4.3 billion adjusted EBITDA shortfall this year.
Rivian Automotive, Inc. last traded at US$13.86 on the NASDAQ.
Information for this story was found via Edgar and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.