Rivian Stock Forecast: RIVN pops over 8% as market approves of lower losses

Rivian (RIVN) stock jumped nearly 8% in Wednesday's premarket in light of a reduced loss reported in its first quarter earnings and a slightly better inflation report for April. Rivian cut their quarterly loss by about 21% more than analysts expected. RIVN stock traded up to $15.03, up 8.4%, while broad US indices like the NASDAQ 100 and S&P 500 stayed muted to slightly down.

The US Bureau of Labor Statistics reported the headline April Consumer Price Index (CPI) rose by 4.9% YoY, slightly better than the 5% growth expected. It seems the Fed's rate hikes continue to work at bringing down inflation. Core CPI rate of 5.5% YoY and 0.4% MoM arrived in line.

Rivian earnings news: Gross profit in 2024

Rivian reported a loss of -$1.25 per share on an adjusted basis. This was $0.34 or 21.4% better than Wall Street consensus of -$1.59 per share. Revenue of $661 million came in slightly below consensus at $661 million. Still, that was nearly a 600% increase over last year. 

Rivian produced 9,395 vehicles during the first quarter and delivered 7,946 of them. CEO and founder RJ Scaringe said he was holding to the 50,000 production goal of 2023, which means production will likely need to climb to about 15,000 a quarter in the back half of the year. Rivian produced about 25,000 last year.

"Growing production volume improves fixed cost leverage at our large-scale manufacturing plant in Normal, Illinois," Scaringe told analysts during the earnings call. "This is crucial to realizing the long-term structural cost advantages of our vertically integrated strategy and represents the primary lever on our path to sell each vehicle profitably."

Scaringe also reiterated that Rivian will keep capex to $2 billion for the full year – a difficult challenge in light of assembly lines needing to ramp up. Cash on the balance sheet dropped from about $14 billion at the end of the fourth quarter to $11.78 billion at the end of Q1 2023.

Despite losing $535 million in gross profit during the quarter, Scaringe and other executives said the goal was to reach gross profitability for the full year in 2024. 

"Compared to our fourth quarter of 2022, Q1 gross profit per delivered vehicle improved 46%," said Chief Financial Officer Claire McDonough.

Rivian stock forecast

Rivian stock's premarket pop seemed to fall short of a significant price action band that saw volume several times this year. This band, roughly from $15.28 to $15.84, worked as support in early January and then again as resistance back at the onset of April. A close above $15.84 is necessary for RIVN stock to rally up to the $21 to $22 resistance level. The Moving Average Convergence Divergence (MACD) indicator is working on bulls' side at the moment with a recent bullish crossover.

RIVN daily chart