Rivian Automotive Inc

Rivian Automotive, Inc. (NASDAQ: RIVN) designs, develops and manufactures electric vehicles and accessories. It sells its vehicles directly to customers in the consumer and commercial markets. The Company’s R1 platform offers the first-generation consumer vehicles: the R1T, a two-row five-passenger pickup truck, and the R1S, a three-row seven-passenger sport utility vehicle (SUV).

Recent Financial and Business Updates:

• Record-Breaking Performance in Q3 2023: The third-quarter results showcase Rivian's relentless pursuit of excellence, emphasizing heightened production rates, enhanced cost efficiency, successful integration of cutting-edge technologies, and an unparalleled customer experience. Surpassing an annualized production rate of 65,000 units marks a new zenith in Rivian's performance history.
• Strategic Advancements in Production and Financial Guidance: Rivian's strategic strides in production lines, in-house motor ramp-up, and a positive supply chain outlook led to an upward revision of the 2023 production guidance to an impressive 54,000 total units. Simultaneously, adept cost management contributes to an enhanced Adj. EBITDA guidance of USD (4,000) million, coupled with a noteworthy reduction in capital expenditures to USD 1,100 million.
• Milestone Production and Cost Efficiency Achievements: The third quarter witnesses a milestone production of 16,304 vehicles, accompanied by a focus on cost efficiency through a comprehensive cost transformation program. Sequential improvements in gross profit per unit, facilitated by portfolio simplification and negotiations for supplier price reductions, underscore Rivian's commitment to financial excellence.
• Innovation and Customer Engagement in Future Platforms: The production initiation of R1 Max pack variants with an impressive EPA-estimated range of up to 410 miles signifies Rivian's commitment to future platforms. Continuous over-the-air updates elevate vehicle capabilities and customer engagement, showcasing Rivian's commitment to staying at the forefront of technological innovation.
• Revolutionizing the Customer Experience and Global Expansion: Rivian's dedication to customer experience unfolds through the scaling of the service network, the establishment of physical locations, and the expansion of the DC fast charging network. With Rivian vehicles covering over 490 million miles, the brand is on a trajectory to redefine the automotive experience globally.
• Electrifying Global Fleets with Rivian Commercial Van: Rivian's groundbreaking announcement opens the door for companies worldwide to electrify their fleets with the Rivian Commercial Van. Despite challenges, the third quarter reports a total revenue of USD 1,337 million, primarily driven by the delivery of 15,564 vehicles.
• Financial Transformation and Positive Gross Profit Trajectory: Evident in the financials is Rivian's significant progress, with a notable reduction in negative gross profit to USD (477) million. Operating expenses increased to USD 963 million, resulting in a loss from operations of USD (1,440) million. Despite this, Rivian maintains a robust financial position with a net loss of USD (1,367) million and an Adjusted EBITDA of USD (942) million.
• Strengthened Balance Sheet and Forward Outlook: Rivian concludes the third quarter with a strategic focus on strengthening its balance sheet, reflected in ending with USD 9,133 million in cash, cash equivalents, and short-term investments. Despite the financial metrics, Rivian sustains its commitment to innovation, production ramp-up, and cost reduction, leading to an optimistic outlook with increased production guidance, improved Adj. EBITDA guidance, and reduced capital expenditures for 2023. 

Technical Observation (on the daily chart)

The Relative Strength Index (RSI) over a 14-day period stands at 59.20, currently up trending, with expectations of some consolidation or a continuation of the upward momentum. Moreover, the price is currently positioned above both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support levels. The price has broken an important resistance zone of USD 17.50-USD 18.00, therefore with an expectation of a decent upward momentum to resistance 2 levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a “BUY” rating is recommended for Rivian Automotive, Inc. (NASDAQ: RIVN) at its current market price of USD 18.81 as on December 07, 2023, at 08:05 am PST. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is December 07, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.