• Rivian's GAAP EPS of $-1.89 missed consensus.
  • Wedbush raised its RIVN price target to $45 from $40.
  • Rivian's Q2 revenue of $364 million beat forecasts.

Rivian (RIVN) stock is largely flat on Friday after releasing second quarter earnings that disappoined on the bottom line late Thursday. RIVN stock is trading at $38.92 in Friday's premarket despite losing as much as 4% on Thursday after the results were released. This is partly due to the market first paying attention to the earnings per share miss but then focusing more strongly on the production story. Wedbush Securities then helped things by boosting its price target from $40 to $45 on Friday, saying that Rivian was showing real promise with its ability to deal with early production obstacles.

Rivian stock news

Praise from Dan Ives over at Wedbush is important, because Ives was an early booster of Tesla and is very much seen as a Tesla bull. Being that Tesla is the leader in the EV space, his judgements on other EV stocks are closely followed.

What impressed Ives was not Rivian's $-1.89 GAAP earnings per share figure, which missed Wall Street consensus by 13 cents, or necessarily its $364 million in Q2 revenue, which was $26 million ahead of projections. What impressed him was Rivian's reaffirmed guidance for 25,000 total production units for the full year despite a number of manufacturing setbacks. 

Rivian was able to complete 4,401 vehicles during the second quarter despite a number of supply chain issues that slowed down production. The electric truck manufacturer built just 2,553 vehicles in the first quarter, which means that Rivian was able to raise the production rate by 72%. To hit the 25,000 unit goal, Rivian will now need to ramp up production by 259% compared with the first half of the year to complete the remaining 18,046 vehicles.

That is no small task, but Rivian needs to greatly increase production to deal with its backlog of 98,000 reservations for its R1 model. Rivian still has the full 100,000 unit order from Amazon for electric delivery vehicles. The company said it would still keep capex under $2 billion for the year by pushing certain capex needs to 2023.

"We ended the second quarter with over $15 billion of cash and remain confident in our path to launch the R2 vehicle platform with our cash on hand," said chief financial officer Claire McDonough.

Rivian stock forecast

Now in the high $30s and well off its lows in the bottom $20s from back in May, Rivian stock is making eyes at the $42 level. This is the area of resistance that held strong in the first half of April. Support can be found at the $34 level, another point of resistance from late April and early May that should now fit into a supportive role. The 100-day moving average sits just below there, lending more credence to the $34 price point. Longer-term support at $24.50 is unlikely to be retested as the 50-day moving average is now up at $33.25. Rivian may consolidate around $42 as it is now just entering overbought territory on the Relative Strength Index (RSI).

RIVN daily chart

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