Rivian Earnings Preview: What to expect from RIVN stock earnings

Rivian (RIVN) stock managed to stem recent losses on Tuesday as it closed up one meagre cent at $22.79. The stock has collapsed this year as the equity environment has totally changed and valuations have come crashing back down to earth. We have continuously flagged Rivian as completely overvalued. How can something with no production be worth more than the top five global automakers combined? In years ahead this will be looked at in a similar light to some of the valuations we look back on now at the top of the DotCom bubble. The share price is completely devoid of reality. 

Rivian Stock News: Ford sells down stake

Ford (F) has announced that it sold 8 million shares of Rivian in a filing on Tuesday. The transaction was done at $26.80 and raised $214 million. This is a far cry from the IPO price of $78 and the post-IPO spike of $179. CNBC also reported another block seller is waiting, and it is rumoured this could be Amazon, which also has a large stake in RIVN. The EV truck maker collapsed 20% this week on the back of an equity market meltdown, but these significant block sales also weighed on the share price. The post-IPO lockup period expired this week, and with equity markets in turmoil, it always seemed odds on that holders would look to sell some stock. Ford still remains a significant holder with approximately 94 million shares left. 

Rivian announces its earnings after the close on Wednesday, and it will be hard to see how they can provide any hope to bulls. The last time around production numbers were a disappointment as was the outlook. Since then supply chains have worsened and various automakers, both electric and legacy, have struggled to provide clear guidance. Rivian has cash, but the rate of cash burn will be a concern, and this metric should be closely watched. Rivian is expected to post earnings per share (EPS) of $-1.66 and revenue of $128.7 million. 

Rivian Stock Forecast: CPI report may help market

We expect equity markets to recover this week if the CPI print comes in better or in line. Selling has been strong, and we may see a bear market rally. Do not expect it to last, however, and there is no certainty that it will spread to growth stocks such as Rivian. If there is another rumoured block for sale, that will keep pressure on Rivian. If this block is cleared, then a short-term 10% pop is likely, but that is a dead cat bounce in our view. $29.49 is the bearish pivot and above is neutral. The Money Flow Index (MFI) is oversold but not yet confirmed by the Relative Strength Index (RSI).

Rivian (RIVN) stock chart, daily